A comprehensive analysis of ocean-atmosphere interaction in the Southern Hemisphere (SH), with an emphasis on the relationships between the Southern Annular Mode (SAM) and observed sea-surface temperature (SST) anomalies, is provided in this study. These interactions are examined in both the austral warm (November-April) and cold (May-October) seasons using regression/correlation analysis on weekly and monthly time scales. Monthly contemporaneous regression analysis reveals strong similarities between the patterns of warm season SST anomalies associated with the SAM and the El Niņo Southern Oscillation (ENSO) that arise as the result of the significant correlation between the SAM and ENSO. Analysis of the processes through which the SST anomalies associated with the SAM are generated demonstrate that sensible and latent heat flux anomalies play a substantial role driving SST variability throughout the SH ocean basins. Anomalous Ekman heat fluxes contribute to the observed SST anomalies in the vicinity of the Antarctic Circumpolar Current but are of secondary importance over other parts of the Southern Hemisphere. Lagged correlations between variability in extra tropical weekly SSTs and the SAM demonstrate that the relationship is strongest and most statistically significant when the SAM leads by ~1 week and weakest when SSTs lead by 4-8 weeks. No distinct patterns of SST anomalies appear to precede variations in the SAM. Comparison of the lagged autocorrelations of the SH SST pattern associated with the SAM with the North Atlantic SST pattern associated with the Northern Annular Mode (NAM) reveals an increased persistence in the SH ocean basins not observed in its North Atlantic counterpart. Possible mechanisms that explain this increased persistence in the SH SSTs associated with the SAM are discussed.