The summer-to-winter SST difference in the Eastern Mediterranean, Red Sea and Gulf of Elat, vary from 6¿C in the Red Sea and Gulf of Elat to 12¿C in the Eastern Mediterranean. This dramatic difference occurs despite the similar monthly mean values of heat flux components that prevail in these seas. We show that direct mixing by the wind stress, fresh water influx or upwelling cannot account for this difference. Instead, we demonstrate the crucial role of the deep-water temperature in determining the amplitude of the annual SST changes via its effect on the temperature gradient above the base of the permanent thermocline. Since the deep water in the Eastern Mediterranean is formed in the Aegean or Adriatic seas and not in situ, it is much colder than in the Red Sea and the Gulf of Elat. This low temperature of the deep water causes the observed, large, SST annual signal.