Abstract Low clouds frequent the subtropical northeastern Pacific Ocean (NEP) and interact with the local sea surface temperature (SST) to form positive feedback. Wind fluctuations drive SST variability through wind–evaporation–SST (WES) feedback, and surface evaporation also acts to damp SST. This study investigates the relative contributions of these feedbacks to NEP SST variability. Over the summer NEP, the low cloud–SST feedback is so large that it exceeds the evaporative damping and amplifies summertime SST variations. The WES feedback causes the locally enhanced SST variability to propagate southwestward from the NEP low cloud deck, modulating El Niño–Southern Oscillation (ENSO) occurrence upon reaching the equator. As a result, a second-year El Niño tends to occur when there are significant warm SST anomalies over the subtropical NEP in summer following an antecedent El Niño event and a second-year La Niña tends to occur when there are significant cold SST anomalies over the subtropical NEP in summer following an antecedent La Niña event The mediating role of the NEP low cloud–SST feedback is confirmed in a cloud-locking experiment with the Community Earth System Model, version 1 (CESM1). When the cloud–ocean coupling is disabled, SST variability over the NEP weakens and the modulating effect on ENSO vanishes. The nonlocal effect of the NEP low cloud–SST feedback on ENSO has important implications for climate prediction.