Combining high resolution model output and geostrophic currents derived from satellite altimeter data, it is shown that the formation of mesoscale eddies in the Mozambique Channel (MZC) is connected to variability in the transport of the South Equatorial Current (SEC). Lagged cross‐correlations of the currents north of Madagascar and vorticities in the MZC, combined with a composite analysis of the model output, show that eddies form in the narrows of the channel approximately 20 weeks following a westward transport pulse in the SEC. A relationship between MZC eddies and the large‐scale variability of the South Indian Ocean may have downstream impacts on the Agulhas leakage, the Atlantic Meridional overturning circulation, and thus climate.