Abstract Previous studies have shown that the Indo-Pacific atmospheric response to ENSO comprises two dominant modes of variability: a meridionally quasi-symmetric response (independent of the annual cycle) and an antisymmetric response (arising from the nonlinear atmospheric interaction between ENSO variability and the annual cycle), referred to as the combination mode (C-mode). This study demonstrates that the direct El Niño signal over the tropics is confined to the equatorial region and has no significant impact on the atmospheric response over East Asia. The El Niño–associated equatorial anomalies can be expanded toward off-equatorial regions by the C-mode through ENSO’s interaction with the annual cycle. The C-mode is the prime driver for the development of an anomalous low-level anticyclone over the western North Pacific (WNP) during the El Niño decay phase, which usually transports more moisture to East Asia and thereby causes more precipitation over southern China. An atmospheric general circulation model is used that reproduces well the WNP anticyclonic anomalies when both El Niño sea surface temperature (SST) anomalies as well as the SST annual cycle are prescribed as boundary conditions. However, no significant WNP anticyclonic circulation anomaly appears during the El Niño decay phase when excluding the SST annual cycle. The analyses herein of observational data and model experiments suggest that the annual cycle plays a key role in the East Asian climate anomalies associated with El Niño through their nonlinear atmospheric interaction. Hence, a realistic simulation of the annual cycle is crucial in order to correctly capture the ENSO-associated climate anomalies over East Asia.