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Abstract The Indian Ocean Dipole (IOD) plays a crucial role in shaping local and global environments, yet its effects on interannual variability of the Arabian Sea oxygen minimum zone (ASOMZ) remains poorly understood. Here, we used a coupled physical‐biogeochemical model to investigate the dynamical response of the ASOMZ to extreme negative (2016) and positive (2019) IOD events. Our findings revealed that the suboxic area of the ASOMZ reduced (expanded) by ∼27% (∼28%) after the negative (positive) IOD event. Compared to the 2019 pIOD event, approximately 2.5 times more oxygen‐rich water was delivered into the Arabian Sea during the 2016 nIOD event, replenishing dissolved oxygen (DO) consumed by intensified upwelling‐induced enhanced remineralization of particulate organic matter (POM), thereby increasing the DO concentration in the Gulf of Aden. Conversely, more POM from the western Arabian Sea was transported to the central Arabian Sea, leading to a subsequent decrease in DO concentration there.