During the last climatic cycle, the monsoon-governed marginal South China Sea and surrounding lands experienced dramatic climate changes on millennial-to-decadal scales. At glacial intervals, the influence of the upper limb of the THC on the South China Sea decreased due to the sea level drop and emergence of the Sunda subcontinent that cut off the inflow of warm Indo-Pacific waters via the Borneo Strait. The sea became a semi-closed basin with the estuarine circulation, oxygen-minimum layer, and the only passageway to the open western Pacific via the Luzon Strait in the northeast. Unlike interglacials, the amplification of climatic signal in the South China Sea due to its sharp isolation from the THC during the glacials along with the strengthening of winter monsoon and weakening of summer monsoon was manifested by remarkable decrease in winter SST and surface water salinity, and increase in seasonality, mixed-layer, and thermocline depths over the major part of the basin, except for the upwelling area off Luzon tip. The short-term variability of hydrological parameters superimposed on the glacial–interglacial cyclicity suggests the global teleconnections as several climatic events in the South China Sea are coeval with DO cycles and changes in the Indian monsoon.