Abstract The inter- and intrahemispheric climate responses to a change in obliquity are investigated using the Geophysical Fluid Dynamics Laboratory Climate Model, version 2.1. (GFDL CM2.1). Reduced obliquity causes a weakening of the seasonal insolation contrast between the summer and winter hemispheres and a strengthening of the meridional insolation gradient within the summer hemisphere. The interhemispheric insolation change is associated with weakening of the cross-equatorial Hadley circulation and reduced heat transport from the summer hemisphere to the winter hemisphere, in both the ocean and atmosphere. In contrast, the intrahemispheric insolation change is associated with increased midlatitude summer eddy activity as seen by the increased atmospheric heat transport at those latitudes. Analysis of the zonal mean atmospheric meridional overturning circulation on isentropic surfaces confirms the increase of the midlatitude eddy circulation, which is driven by changes of sensible and latent heat fluxes, as well as changes in the stratification or distribution of entropy. It is suggested that the strengthening of this circulation is associated with an equatorward shift of the ascending branch of the winter Hadley cell.