Paleogene stable oxygen and carbon isotopes were measured in formainifera from ODP Sites 689 and 690 at Maud Rise in the Atlantic Ocean sector of the Southern Ocean, and from Sites 738, 744, 748 and 749 at the southern Kerguelen Plateau in the Indian Ocean sector. These data were compared with sedimentological data from the same sample set.Both benthic and planktic δ18O values document a cooling trend beginning around 49.5 Ma at all sites. During the late middle Eocene planktic δ18O values indicate a steepening latitudinal temperature gradient from 14°C at the northern sites towards 10°C at the southernmost sites. Terrigeneous sand grains of probably ice rafted origin and clay mineral assemblages point to the existence of a limited East Antarctic ice cap with some glaciers reaching sea level as early as middle Eocene time around 45.5 Ma. Between 45 and 40 Ma, average paleotemperatures were between 5° and 7°C in deep and intermediate water masses, while near-surface water masses ranged between 6° and 10°C. During the late Eocene, between 40 and 36 Ma, average temperatures further decreased to 4°–5°C in the deep and intermediate water masses and to 5°–8°C near the sea surface.Abruptly increasing δ18O values at approximately 35.9 Ma exactly correlate with a sharp pulse in the deposition of ice-rafted material on the Kerguelen Plateau, a dramatic change in clay mineral composition, and an altered Southern Ocean circulation indicated by a differentiation of benthic δ13C values between sites, increasing opal concentrations and decreasing carbonate contents. For planktic and benthic foraminifera this δ18O increase ranges between 1.0 and 1.3‰, and between 0.9 and 1.4‰, respectively.We favour a hypothesis that explains most of the δ18O shift at 35.9 Ma with a buildup of a continental East Antarctic ice sheet. Consequently, relatively warm Oligocene Antarctic surface water temperatures probably are explained by a temperate, wet-based nature of the ice sheet. This would also aid in the fast build-up of an ice sheet by enhancing the moisture transport on to the continent.