As a dominant mode of jet variability on subseasonal time scales, the Southern Annular Mode (SAM) provides a window into how the atmosphere can produce internal oscillations on longer-than-synoptic time scales. While SAM’s existence can be explained by dry, purely barotropic theories, the time scale for its persistence and propagation is set by a lagged interaction between barotropic and baroclinic mechanisms, making the exact physical mechanisms challenging to identify and to simulate, even in latest generation models. By partitioning the eddy momentum flux convergence in MERRA-2 using an eddy–mean flow interaction framework, we demonstrate that diabatic processes (condensation and radiative heating) are the main contributors to SAM’s persistence in its stationary regime, as well as the key for preventing propagation in this regime. In SAM’s propagating regime, baroclinic and diabatic feedbacks also dominate the eddy–jet feedback. However, propagation is initiated by barotropic shifts in upper-level wave breaking and then sustained by a baroclinic response, leading to a roughly 60-day oscillation period. This barotropic propagation mechanism has been identified in dry, idealized models, but here we show evidence of this mechanism for the first time in reanalysis. The diabatic feedbacks on SAM are consistent with modulation of the storm-track latitude by SAM, altering the emission temperature and cloud cover over individual waves. Therefore, future attempts to improve the SAM time scale in models should focus on the storm-track location, as well as the roles of the cloud and moisture parameterizations. Significance Statement As they circumnavigate the planet, the tropospheric jet streams slowly drift north and south over about 30 days, longer than the normal limit of weather prediction. Understanding the source of this “memory” could improve our knowledge of how the atmosphere organizes itself and our ability to make long-term forecasts. Current theories have identified several possible internal atmospheric interactions responsible for this memory. Yet most of the theories for understanding the jets’ behavior assume that this behavior is only weakly influenced by atmospheric water vapor. We show that this assumption is not enough to understand jet persistence. Instead, clouds and precipitation are more important contributors in reanalysis data than internal “dry” mechanisms to this memory of the Southern Hemisphere jet.