The Indian Ocean Dipole (IOD) is an interannual mode of climate variability in the Indian Ocean that has intensified with 20th century global-warming. However, instrumental data shows a global-warming hiatus between the late-1990s and 2015. It is presently not clear how the global-warming hiatus affects modes of climate variability such as the IOD, and their basin-wide ocean-atmosphere teleconnections. Here, we present a 26-year long, biweekly record of Sr/Ca and δ18O from a Porites coral drilled in the Gulf of Oman. Sea surface temperature (SSTanom) is calculated from Sr/Ca ratios, and seawater δ18O (δ18Osw-anom) is estimated by subtracting the temperature component from coral δ18O. Our δ18Osw-anom record reveals a significant regime shift in 1999, towards lower mean δ18Osw values, reflecting intensified upwelling in the western Indian Ocean. Prior to the 1999 regime shift, our SSTanom and δ18Osw-anom show a clear IOD signature, with higher values in the summer of positive-IOD years due to weakened upwelling. The IOD signature in SSTanom and δ18Osw-anom disappears with the overall intensification of upwelling after the 1999 regime shift. The inferred increase in upwelling is likely driven by an intensified Walker circulation during the global-warming hiatus. Upwelling in the Western Indian Ocean uncouples from the IOD.