Radiative transfer calculations are conducted to determine the contribution of temperature and water vapor anomalies toward the surface clear-sky downward longwave radiation (DLR) anomalies of the NAO. These calculations are motivated by the finding that the NAO’s skin temperature anomalies are driven primarily by changes in surface DLR. The clear-sky radiative transfer calculations follow the result that the clear-sky surface DLR anomalies can account for most of the all-sky surface DLR anomalies of the NAO. The results of the radiative transfer calculations prompt an analysis of the thermodynamic energy and total column water (TCW) budget equations, as water vapor and temperature anomalies are found to be equally important drivers of the surface DLR anomalies of the NAO. Composite analysis of the thermodynamic energy equation reveals that the temperature anomalies of the NAO are wind driven: the advection of climatological temperature by the anomalous wind drives the NAO’s temperature anomalies at all levels except for those in the upper troposphere–lower stratosphere where the advection of anomalous temperature by the climatological wind becomes dominant. A similar analysis of the TCW budget reveals that changes in TCW are driven by water flux convergence. In addition to determining the drivers of the temperature and TCW anomalies, the thermodynamic energy and water budget analyses reveal that the decay of the temperature anomalies occurs primarily through vertical mixing, and that of the water anomalies mostly by evaporation minus precipitation.