This study investigates the impact of Indian Ocean sea surface temperature (SST) anomalies on the atmospheric circulation of the Southern Hemisphere during El Niño events, with a focus on Australian climate. During El Niño episodes, the tropical Indian Ocean exhibits two types of SST response: a uniform “basinwide warming” and a dipole mode—the Indian Ocean dipole (IOD). While the impacts of the IOD on climate have been extensively studied, the effects of the basinwide warming, particularly in the Southern Hemisphere, have received less attention. The interannual basinwide warming response has important implications for Southern Hemisphere atmospheric circulation because 1) it accounts for a greater portion of the Indian Ocean monthly SST variance than the IOD pattern and 2) its maximum amplitude occurs during austral summer to early autumn, when large parts of Australia, South America, and Africa experience their monsoon. Using observations and numerical experiments with an atmospheric general circulation model forced with historical SST from 1949 to 2005 over different tropical domains, the authors show that the basinwide warming leads to a Gill–Matsuno-type response that reinforces the anomalies caused by changes in the Pacific as part of El Niño. In particular, the basinwide warming drives strong subsidence over Australia, prolonging the dry conditions during January–March, when El Niño–related SST starts to decay. In addition to the anomalous circulation in the tropics, the basinwide warming excites a pair of barotropic anomalies in the Indian Ocean extratropics that induces an anomalous anticyclone in the Great Australian Bight.