Observational and model evidence has been mounting that mesoscale eddies play an important role in air--sea interaction in the vicinity of Western Boundary Currents. What has been less clear is the interplay between oceanic and atmospheric meridional eddy heat transport (MEHT). It is first shown using a high--resolution fully--coupled climate
simulation of the Community Earth System Model (CESM) that variability in the North
Pacific, particularly in the Kuroshio Extension region, matches observations with similar
mechanisms; the Pacific Decadal Oscillation (PDO) leads Kuroshio Extension variability with a ~3--4 year lag. It is then shown that there is a compensation of ~0.1 PW between wintertime atmospheric and oceanic MEHT on decadal time scales in the North Pacific. This compensation has characteristics of Bjerknes compensation and is tied to the mesoscale eddy activity in Kuroshio Extension region. During weakly meandering (``stable'') states there is the persistence of equatorward oceanic MEHT south of the jet and enhanced wintertime surface heat fluxes (SHFs). The atmospheric vertically- integrated meridional eddy heat flux is 22% larger compared to the mean with a maximum increase in MEHT of 0.11±0.03 PW. When the Kuroshio Extension is in a strongly meandering (``unstable'') state oceanic MEHT is enhanced by a maximum of
0.07±0.02 PW with a subsequent reduction in wintertime ocean--to--atmosphere SHFs and atmospheric MEHT.