Tropical explosive volcanism is one of the most important natural factors that significantly impact the climate system and the carbon cycle on annual to multi-decadal time scales. The three largest explosive eruptions in the last 50 years—Agung, El Chichón, and Pinatubo—occurred in spring/summer in conjunction with El Niño events and left distinct negative signals in the observational temperature and CO2 records. However, confounding factors such as seasonal variability and El Niño-Southern Oscillation (ENSO) may obscure the forcing-response relationship. We determine for the first time the extent to which initial conditions, i.e., season and phase of the ENSO, and internal variability influence the coupled climate and carbon cycle response to volcanic forcing and how this affects estimates of the terrestrial and oceanic carbon sinks. Ensemble simulations with the Earth System Model (Climate System Model 1.4-carbon) predict that the atmospheric CO2 response is ˜60% larger when a volcanic eruption occurs during El Niño and in winter than during La Niña conditions. Our simulations suggest that the Pinatubo eruption contributed 11 ± 6% to the 25 Pg terrestrial carbon sink inferred over the decade 1990–1999 and −2 ± 1% to the 22 Pg oceanic carbon sink. In contrast to recent claims, trends in the airborne fraction of anthropogenic carbon cannot be detected when accounting for the decadal-scale influence of explosive volcanism and related uncertainties. Our results highlight the importance of considering the role of natural variability in the carbon cycle for interpretation of observations and for data-model intercomparison.