The causes of decadal variations of North Pacific sea surface temperatures (SSTs) are examined using a hindcast performed with an ocean general circulation model thermodynamically coupled to an atmospheric mixed layer model (OGCM–AML model) and forced by the time history of observed surface winds. The ‘‘shift’’ in North Pacific Ocean climate that occurred around 1976/77 is focused on since this is the best observed example available. After the 1976/77 shift the Aleutian low deepened and moved to the southeast of its previous position. This placed anomalous cyclonic flow over the North Pacific. The SST response, as simulated by the ocean model, consisted of two components: a fast and local part and a delayed and remote part. In the central Pacific stronger westerlies cool the ocean by increased equatorward Ekman drift. Here the dynamical cooling is sufficiently large that the surface fluxes damp the SST anomaly. This Ekman response is fast and local and cools the SSTs beginning in 1977 and persisting through 1988. In the early 1980s cool SSTs emerge in the latitude of the Kuroshio–Oyashio Extension east of Japan and persist until 1989. It is shown that this region of cooling is associated with a southward displacement of the latitude of the confluence between the subpolar and subtropical gyres. This is consistent with the southward shift in the zero wind stress curl line. The timescale for the gyre adjustment is no more than 4 yr. These results compare favorably with observations that also first show the central Pacific cooling and, later, cooling east of Japan. Observations show the cooling in the Kursohio–Oyashio Extension region to be damped by surface fluxes, implying an oceanic origin. The timescale of adjustment is also supported by analyses of observations. The delayed response of the ocean to the varying winds therefore creates SST anomalies as the latitude of the gyre confluence varies. The delayed SST response is of the same sign as the locally forced SST signal suggesting that, to the extent there is a feedback, it is positive. Implications for the origins of decadal climate variability of the North Pacific are discussed.