Recent observations (the CANEK Program [Candela et al., 2002]) suggest that potential vorticity (PV) flux anomaly (VFA) at Yucatan Channel may serve as a useful indicator of Loop Current variability, including Loop Current extension, retraction, and eddy shedding. Intuitively, anticyclonic VFA extends the Loop Current into the Gulf of Mexico and cyclonic VFA causes retraction or even shedding. However, this intuition is inconsistent with PV conservation. The problem is reexamined here by careful analyses of the relation between VFA and Loop Current variability using (1) the results of a 15-year numerical simulation of shedding specified with simple forcing, and (2) CANEK and satellite observations. Both model and observations indicate that Loop Current eddy shedding or retraction tends to occur shortly (1∼2 months) after the influx of VFA at Yucatan has turned anticyclonic, and that these events are sometimes preceded by a more prolonged period of influx of cyclonic VFA. These findings suggest that contrary to intuition, influx of cyclonic VFA tends to extend the Loop Current into the Gulf, thus making the Loop Current more susceptible to retract or shed an eddy, and influx of anticyclonic VFA may then “trigger” retraction or eddy shedding. However, the Loop Current's behaviors are much more complex than can be prescribed by these simple rules. A much longer observational data set, coupled with more refined model experiments and sophisticated analyses, is required to further quantify the phenomenon.