A global circulation model has been used to explore observed relationships between cold sea surface temperature anomalies in the Australian region and drought over the Australian continent. The model employed a comprehensive physics package, was set up for fixed January conditions, and used climatological sea surface temperatures. Two experiments were performed: one involving a large cold sea surface temperature anomaly located north of Australia but extending well into the Pacific and Indian Oceans, together with a much smaller cold anomaly in the tropical Atlantic; the other added a warm anomaly in the tropical eastern Pacific to the previous anomalies. The overall results were very similar in the two experiments. Droughtlike conditions were produced over parts of Australia, southern Africa, South America, and North America. By relating variations in evaporation and precipitation rates to changes in the synoptic meridional velocity distribution, a reasonably coherent understanding of the model's responses to the anomalies was obtained. The dominant response was in the Australian region, with secondary responses being produced over southern Africa and South America. This might indicate some form of synchronous behavior over the continents of the southern hemisphere to such sea surface temperature anomalies. The tropical easterlies were enhanced by the SST anomalies, resulting in a single westerly duct remaining between the two hemispheres. Difference charts of the 200-mbar height field for the anomaly and control experiments revealed a weak wave train that originated in the duct region and propagated to North America, where it apparently caused large changes in the synoptic conditions over North America. Overall the experiments help to establish a cause-and-effect relationship between cold sea surface temperature anomalies and drought in the adjacent Australian region together with a reinforcement of these effects when an El Nino type warm anomaly is located in the east Pacific. Nevertheless, the need is highlighted for much further research before the requirements for forecasting drought can be assessed.