A study on interannual tropical cyclone activity in the Northeast Pacific basin is presented, using statistical methods including the deviance test to investigate tropical cyclone frequency and its relationship with seasonal environmental conditions from 1972 to 1997. This follows on from the work of Collins and Mason (2000) who noted that the NE Pacific has more than one population of tropical cyclones with regard to causal factors, and that tropical cyclone frequencies in the two identified development regions show large differences in their trends with time and in their relationships with seasonally averaged environmental variables. The current study focuses on the main factors which are responsible for variations in tropical cyclone frequency. In the western development region (west of 116°W), mid-tropospheric relative humidity and sea surface temperature are found to be the dominant factors. These are two of Gray's (1979) necessary controls on tropical cyclone formation, and analyses of the NCEP/NCAR reanalysis data show that both variables are probably acting locally on tropical cyclone genesis, as threshold effects provide conducive/non-conducive conditions in different parts of the region. Interannual variations in tropical cyclone frequency therefore occur when considering a spatial averaging over the whole development region. Increases in sea surface temperature results in increases in the maximum potential intensity of tropical cyclones which may also increase frequencies in the higher intensity tropical cyclone categories as more tropical cyclones are pushed into those categories. The interannual variability of mid-tropospheric relative humidity in this area, as the dominant control on hurricane frequency, is then studied in detail. It is found that interannual variations in seasonal relative humidity are significantly influenced, via the wind field, by ENSO and by the intensity of the thermal low in North America. It is shown that ENSO has different effects on tropical cyclone frequency in the eastern development region (east of 116°W) compared with the western development region.