A mechanism of internal variability of Indian summer monsoon through the modulation of intraseasonal oscillation (ISO) by land-atmosphere feedback is proposed. Evidence of feedback between surface soil moisture and ISOs is seen in the soil moisture data from GSWP-2 and rainfall data from observations. Using two sets of internal simulation by a regional climate model (RCM), it is shown that internally generated anomalous soil moisture interacts with the following ISO and generates interannual variability. To gain further insight, 27 years of sensitivity experiment by prescribing wet (dry) soil moisture condition during break (active) period along with a control simulation are carried out. The sensitivity experiment reveals the large-scale nature of soil moisture and ISO feedback which takes place through the changes in atmospheric stability by altering lower-level atmospheric conditions. The feedback is inherent to the monsoon system and a part of it acts through the intraseasonal varying memory of soil moisture. The RCM used to test the hypothesis is constrained by one-way interactions at the lateral boundary. Experiments with a much larger domain upheld the findings and hence suggest the true nature of soil moisture and ISO feedback present in the monsoon system.