The sensitivity of tropical ocean dynamics to the ocean lateral mixing orientation is explored using a z-coordinate climate-type ocean general circulation model. Compared to a simulation using horizontal mixing on both tracers and dynamics (HOR), a rotation of the tracer tensor in which mixing occurs along isopycnals (ISOT) improves the structure of the off-equatorial density field, which consequently enhances the off-equatorial circulation through geostrophy. However, the dynamics at the equator in ISOT are degraded compared to observations, as the upper part of the Equatorial Undercurrent (EUC) is too deep and the South Equatorial Current (SEC) is too intense. Next, isopycnal diffusion on momentum is implemented (ISOMT). An examination of the momentum balance at the equator shows that this change in lateral diffusion direction significantly reduces the meridional diffusive flux of momentum at the top of the EUC. This intensifies the EUC, which, in turn, weakens the SEC along the equator through vertical diffusion. The equatorial degradations observed in ISOT disappear. Compared to ISOT and HOR, the separation of the two SEC branches and the equatorial current magnitude in the surface layers are much better reproduced. Moreover, in contrast to the results from ISOT and HOR, isopycnal momentum mixing allows the existence of both horizontal up-gradient and down-gradient eddy momentum fluxes, notably improving the vertical profile of the lateral viscosity term. The ISOMT experiment is therefore shown to be the closest to observations. These results suggest that isopycnal mixing should be used on both tracers and momentum to better simulate the observed eddy effects and the tropical circulation in climate models.