Kuroshio is a western boundary current in the North Pacific, which normally leaps across Luzon Strait but occasionally penetrates into the South China Sea forming a loop current and shedding rings. A theoretical analysis of a single-layer depth-averaged model suggests that the flow inside the strait is governed by the balance between the beta effect and inertia. The model correctly predicts the existence of multiple steady states (leaping and penetrating, corresponding to the large and small transport of the Kuroshio), hysteresis in evolution between them, explains the shape of the main intrusion, and formation of rings. ADCP and mooring observations support the theoretical predictions. Comparison of the NLOM data on the Kuroshio penetrations with the Kuroshio Path Index shows connection of the flow path with the strength of the circulation in the subtropical North Pacific gyre and hence with the transport of Kuroshio on decadal time scales. Farris and Wimbush (1996) found a relationship between the loop current stage (derived from satellite infrared images) and the wind stress history: the Kuroshio penetrations occur when the time-integrated strength of the northeast monsoon exceeds a threshold value. This is in an agreement with the present theory in the sense that the penetrations occur when the Kuroshio is weakened by the monsoon blowing in the opposite direction. The seasonality is further corroborated by our analysis of NPACNFS, satellite, mooring, and historical hydrographic data.