Adjoint model sensitivity analyses were applied for the loop current (LC) and its eddy shedding in the Gulf of Mexico (GoM) using the MIT general circulation model (MITgcm). The circulation in the GoM is mainly driven by the energetic LC and subsequent LC eddy separation. In order to understand which ocean regions and features control the evolution of the LC, including anticyclonic warm-core eddy shedding in the GoM, forward and adjoint sensitivities with respect to previous model state and atmospheric forcing were computed using the MITgcm and its adjoint. Since the validity of the adjoint model sensitivities depends on the capability of the forward model to simulate the real LC system and the eddy shedding processes, a 5 year (2004–2008) forward model simulation was performed for the GoM using realistic atmospheric forcing, initial, and boundary conditions. This forward model simulation was compared to satellite measurements of sea-surface height (SSH) and sea-surface temperature (SST), and observed transport variability. Despite realistic mean state, standard deviations, and LC eddy shedding period, the simulated LC extension shows less variability and more regularity than the observations. However, the model is suitable for studying the LC system and can be utilized for examining the ocean influences leading to a simple, and hopefully generic LC eddy separation in the GoM. The adjoint sensitivities of the LC show influences from the Yucatan Channel (YC) flow and Loop Current Frontal Eddy (LCFE) on both LC extension and eddy separation, as suggested by earlier work. Some of the processes that control LC extension after eddy separation differ from those controlling eddy shedding, but include YC through-flow. The sensitivity remains stable for more than 30 days and moves generally upstream, entering the Caribbean Sea. The sensitivities of the LC for SST generally remain closer to the surface and move at speeds consistent with advection by the high-speed core of the current, while sensitivities to SSH generally extend to deeper layers and propagate more slowly. The adjoint sensitivity to relative vorticity deduced from the sensitivities to velocity fields suggests that advection of cyclonic (positive) relative vorticity anomalies from the YC or the LCFEs accelerate the LC eddy separation. Forward model perturbation experiments were performed to complement and check the adjoint sensitivity analysis as well as sampling the predictability and nonlinearity of the LC evolution. The model and its adjoint can be used in four-dimensional variational assimilation (4D-VAR) to produce dynamically consistent ocean state estimates for analysis and forecasts of the circulation of the GoM.