The notion of mode interaction is proposed as a deterministic concept for understanding climatic modes at various time-scales. This concept is based on the distinction between fundamental modes relying on their own physical mechanisms and derived modes that emerge from the interaction of two other modes. The notion is introduced and applied to interannual climate variability. Observational evidence is presented for the tropospheric biennial variability to be the result of the interaction between the annual cycle and a quasi-decadal mode originating in the Atlantic basin. Within the same framework, Pacific interannual variability at time-scales of about 4 and 6 yr is interpreted as the result of interactions between the biennial and quasi-decadal modes of climate variability. We show that the negative feedback of the interannual modes is linked to the annual cycle and the quasi-decadal mode, both originating outside the Pacific basin, whereas the strong amplitudes of interannual modes result from resonance and local positive feedback. It is argued that such a distinction between fundamental and derived modes of variability is important for understanding the underlying physics of climatic modes, with strong implications for climate predictability.