The South Pacific Decadal Oscillation (SPDO) is regarded as the mirror image of the Pacific Decadal Oscillation (PDO), and the SPDO is seen as a manifestation of the Pacific-wide Interdecadal Pacific Oscillation (IPO). In this study, upper ocean variability and potential predictability of the SPDO is examined using HadISST data and an atmosphere-forced ocean general circulation model. We apply a simple diagnostic method to investigate the potential predictability of the IPO in terms of the fractional contribution made by the decadal component in the South Pacific, Tropical Pacific and North Pacific Oceans. We show that oceanic subsurface dynamics in both the North Pacific and South Pacific act to significantly redden the sea surface temperature variability. Nonlinear baroclinic Rossby waves in the western subtropical South Pacific act as the low-pass filter of decadal variability that is amplified by bottom topography. In particular, the Kermadec Ridge in the southwest Pacific enhances the decadal signature more prominently than anywhere else in the Pacific basin. Using a first-order autoregressive model, we demonstrate that the high frequency time variability of the Pacific-South American pattern is a critically important atmospheric/stochastic driver of decadal climate variability in the surface SPDO. This reddening process is analogous to recent studies of the relationship between the Aleutian Low and PDO in the North Pacific –albeit that the relationship in the South Pacific appears to be even stronger. We find that the potential decadal predictability in the upper South Pacific Ocean leads the North Pacific signature, which may indicate a crucial role for South Pacific processes in influencing the Pacific-wide IPO.