Reconstructions of sea surface temperature (SST) based on instrumental observations suggest that the equatorial Pacific zonal SST gradient has increased over the twentieth century. While this increase is suggestive of the ocean dynamical thermostat mechanism of Clement et al., observations of a concurrent weakening of the zonal atmospheric (Walker) circulation are not. Here we show, using heat and momentum budget calculations on an ocean reanalysis dataset, that a seasonal weakening of the zonal atmospheric circulation is in fact consistent with cooling in the eastern equatorial Pacific (EEP) and thus an increase in the zonal SST gradient. This cooling is driven by a strengthening Equatorial Undercurrent (EUC) in response to decreased upper-ocean westward momentum associated with weakening equatorial zonal wind stress. This process can help to reconcile the seemingly contradictory twentieth-century trends in the tropical Pacific atmosphere and ocean. Moreover, it is shown that coupled general circulation models (CGCMs) do not correctly simulate this process; we identify a systematic bias in the relationship between changes in equatorial surface zonal wind stress in the EEP and EUC strength that may help to explain why observations and CGCMs have opposing trends in the zonal SST gradient over the twentieth century.