Empirical orthogonal function (EOF) analysis is used to characterize interannual upper ocean temperature variability since mid‐1980s along two repeated XBT sections across the Indian Ocean. The mode 1 EOF loadings have deepened thermocline in the western tropical Indian Ocean and a shoal thermocline in the east/southeast Indian Ocean during the 1994 and 1997/98 Indian Ocean dipole (IOD) events. Reversed anomalies occur during 1988/89, 1996, and 1998/99. The mode 2 EOF loadings only have significant magnitudes related to the IOD, with upwelling (downwelling) along the Sumatra‐Java coast and downwelling (upwelling) in the southern subtropics leading (lagging) the IOD peaks. Lagged correlations between sea level anomaly and westward wind stress anomaly along the equatorial Indian Ocean (an IOD index) support the EOF analysis: the two EOF modes are linked by propagation and reflection of subtropical Rossby waves and equatorial Kelvin waves, which also contribute to reverse the IOD through a delayed action.