Abstract Following Goodman and Marshall (hereinafter GM), an improved intermediate midlatitude coupled ocean–atmosphere model linearized around a basic state is developed. The model assumes a two-layer quasigeostrophic atmosphere overlying a quasigeostrophic upper ocean that consists of a constant-depth mixed layer, a thin entrainment layer, and a thermocline layer. The SST evolution is determined within the mixed layer by advection, entrainment, and air–sea flux. The atmospheric heating is specified at midlevel, which is parameterized in terms of both the SST and atmospheric temperature anomalies. With this coupled model, the dynamical features of unstable ocean–atmosphere interactions in the midlatitudes are investigated. The coupled model exhibits two types of coupled modes: the coupled oceanic Rossby wave mode and the SST-only mode. The SST-only mode decays over the entire range of wavelengths, whereas the coupled oceanic Rossby wave mode destabilizes over a certain range of wavelengths (∼10 500 km) when the atmospheric response to the heating is equivalent barotropic. The relative roles of different physical processes in destabilizing the coupled oceanic Rossby wave are examined. The main processes emphasized are the influence of entrainment and advection for determining SST evolution, and the atmospheric heating profile. Although either entrainment or advection can lead to unstable growth of the coupled oceanic Rossby wave with similar wavelength dependence for each case, the advection process is found to play the more important role, which differs from GM’s results in which the entrainment process is dominant. The structure of the unstable coupled mode is sensitive to the atmospheric heating profile. The inclusion of surface heating largely reduces the growth rate and stabilizes the coupled oceanic Rossby wave. In comparison with observations, it is demonstrated that the structure of the growing coupled mode derived from the authors’ model is closer to reality than that from the previous model.