Abstract Interannual variability of the global radiation budget, regions that contribute to its variability, and what limits albedo variability are investigated using Clouds and the Earth’s Radiant Energy System (CERES) data taken from March 2000 through February 2004. Area-weighted mean top-of-atmosphere (TOA) reflected shortwave, longwave, and net irradiance standard deviations computed from monthly anomalies over a 1° × 1° region are 9.6, 7.6, and 7.6 W m−2, respectively. When standard deviations are computed from global monthly anomalies, they drop to 0.5, 0.4, and 0.4 W m−2, respectively. Clouds are mostly responsible for the variation. Regions with a large standard deviation of TOA shortwave and longwave irradiance at TOA are the tropical western and central Pacific, which is caused by shifting from La Niña to El Niño during this period. However, a larger standard deviation of 300–1000-hPa thickness anomalies occurs in the polar region instead of the tropics. The correlation coefficient between atmospheric net irradiance anomalies and 300–1000-hPa thickness anomalies is negative. These indicate that temperature anomalies in the atmosphere are mostly a result of anomalies in longwave and dynamical processes that transport energy poleward, instead of albedo anomalies by clouds directly affecting temperature anomalies in the atmosphere. With simple zonal-mean thermodynamic energy equations it is demonstrated that temperature anomalies decay exponentially with time by longwave emission and by dynamical processes. As a result, the mean meridional temperature gradient is maintained. Therefore, mean meridional circulations are not greatly altered by albedo anomalies on an annual time scale, which in turn provides small interannual variability of the global mean albedo.