A nonlinear, 4½-layer reduced-gravity ocean model with active thermodynamics and mixed layer physics is used to investigate the causes of sea level interannual variability in the Bay of Bengal, which may contribute to flooding and cholera outbreaks in Bangladesh. Forcing by NCEP–NCAR reanalysis fields from 1958 to 1998 yields realistic solutions in the Indian Ocean basin north of 29°S. Controlled experiments elucidate the roles of the following forcing mechanisms: interannual variability of the Bay of Bengal wind, equatorial wind, river discharges into the bay, and surface buoyancy flux including precipitation minus evaporation (heat fluxes + P − E). Sea level changes in the bay result largely from wind variability, with a typical amplitude of 10 cm and occasionally 10–25 cm at an interannual timescale. Near the eastern and northern boundaries, sea level anomalies (SLAs) are predominantly caused by equatorial wind variability, which generates coastal Kelvin waves that propagate into the bay along the eastern boundary. Near the western boundary the bay wind has a comparable influence as the equatorial wind, especially during the southwest monsoon season, owing to the counterclockwise propagation of coastal Kelvin waves forced by the large-scale alongshore wind stress in the bay. In the bay interior, SLAs are dominated by the equatorial wind forcing in the central bay, result almost equally from the equatorial and the bay wind in the southwestern bay, and are dominated by the bay wind forcing in the southwestern bay during the southwest monsoon. The westward intensification of the bay wind influence is associated with the westward propagation of Rossby waves forced by the large-scale wind curl in the interior bay. The effect of heat fluxes + P − E is generally small. Influence of interannual variability of river discharges is negligible. SLAs caused by the equatorial wind at the equator and that caused by the bay wind along the northern and western boundaries as well as in the southwestern bay are significantly correlated, reflecting the anomalous wind pattern associated with the dipole mode event in the tropical Indian Ocean. Given the dominance of equatorial wind forcing near the northern bay boundary, SLAs (or alternatively westerly wind anomalies) in the equatorial ocean may serve as a potential index for predicting Bangladesh flooding and cholera.