A new Arctic Oscillation (AO) Index (AOI) is defined as the normalized difference in zonal-averaged sea level pressure anomalies between 35°N and 65°N, and it is a measure of hemispheric-wide fluctuations in air mass between zones of high and low pressure anomalies centered around these two latitudes of Northern Hemisphere. The AOI captures an optimal representation of the temporal-spatial features of the AO, and the latitudial zones centered at 35°N and 65°N are denoted as annular belts of action for the AO. The analysis indicates that the Ferrel cell plays a dominant role in the zonal mean circulation anomalies related to the annual paradigm, implying a strong dynamical origin of the AO. Due to its simple definition and computation, the AOI has been extended back to 1872, and can be updated in real time for climate monitoring. The longest AOI time series exhibits a major source of low-frequency variability in the Northern Hemispheric climate.