The current study investigates the modulation of the tropical cyclone (TC) frequency (TCF) over the Bay of Bengal (BoB) by the southern annular mode (SAM). The analysis reveals that the SAM–TCF relationship during October–November–December has undergone interdecadal changes from significant during 1971–1994 to insignificant during 1995–2021. This contrasting influence of the SAM on the TCF occurrence is also echoed in the large‐scale environmental variables conducive to forming tropical cyclones (TCs). Based on the possible mechanism, we found that the SAM can imprint tripole sea surface temperature (SST) patterns in the southern Indian Ocean via altering surface wind speed from 1971 to 1994. The SAM‐related tripole SST pattern induces the surface‐level anticyclone anomaly, which enhances the south easterlies towards the western equatorial Indian Ocean. Such intensified anomalous wind crosses the equator and diverts towards the east to form the cyclone anomaly in the BoB. Meanwhile, at 200 hPa, the anomalous anticyclone over western Australia induces divergent wind flows over the study region. Consequently, the ascending motion in BoB promotes the tropical cyclone generation. During 1995–2021, however, the SAM is associated with the dipole SST pattern in the southern Indian Ocean. Correspondingly, the SAM‐related dipole SST yields anomalous atmospheric circulations confined to the Southern Hemisphere and eventually fails to impact the formation of TCs in the northern Indian Ocean, where the study region is located. The findings of this research can be useful in advancing our knowledge of the interannual variability of TCs activity in the BoB based on the remote climate signal.