We investigate the physical processes behind summer drought in North China by evaluating moisture and energy budget diagnostics and linking them to anomalous large-scale circulation patterns. Moisture budget analysis reveals that summer drought in North China was caused dynamically by reduced vertical moisture advection due to anomalous subsidence and reduced horizontal moisture advection due to anomalous northeasterly winds. Energy budget analysis shows that reduced latent heating was balanced dynamically by decreased dry static energy (DSE) divergence in the middle-to-upper troposphere. Linking these results to previous work, we suggest that summer drought in North China was predicated on co-occurrence of the positive phases of the Eurasian (EU) and Pacific–Japan (PJ) teleconnection patterns, potentially modulated by the circumglobal teleconnection (CGT). In the typical case, the negative phase of the CGT intensified the positive EU-related upper-level cyclone. Resulting upper-level cooling and positive surface feedback imposed a cold-core surface anticyclone that weakened with height. By contrast, when the positive phase of the CGT occurred in tandem with the positive EU and PJ patterns, the anticyclone had a warm core and intensified with height. The two cases were unified by strong subsidence but exhibited opposite meridional advection anomalies. In the cold core cases, meridional moisture inflow was reduced but meridional DSE export was enhanced, further limiting precipitation while maintaining negative thermal anomalies. In the warm core case, which only occurred once, enhanced meridional inflow of water vapor supplied moisture for sporadic precipitation while reduced meridional DSE export helped to maintain strong static stability.