In this paper, we employ reanalysis data to systematically investigate the development of the Indian Ocean dipole (IOD), thereby distinguishing the SST–wind causal relationship during IOD development. The results indicate that the variations in sea surface temperature anomalies (SSTA) are particularly important during IOD development. SSTAs over the eastern Indian Ocean (EIO) lead to variations in Sumatran coastal winds and equatorial zonal winds, whereas SSTAs over the western Indian Ocean (WIO) lag behind these variations. On this basis, the Community Earth System Model (CESM) is adopted to examine the influences of different atmospheric physical processes and model resolutions on the simulation of the IOD evolution. For this purpose, four sets of sensitivity experiments are carried out involving two versions of the Community Atmospheric Model (CAM4 or CAM5) and two atmospheric model resolutions (0.9° × 1.25° or 1.9° × 2.5°). The CAM5 simulation experiments better capture the detailed characteristics of IOD development, especially the wind–SST causal relationship, than the CAM4 experiments. Moreover, increasing the resolution of the atmospheric model can effectively reduce the simulation bias, thus benefiting the simulation of the SST–wind relationship.