<p>The variability of sea temperature and salinity in Indonesian coastal waters is strongly influenced by regional climate phenomena, particularly the Indian Ocean Dipole (IOD). Lampung Bay, located in the southeastern part of Sumatra and directly connected to the Sunda Strait, serves as an important transition zone between the Java Sea and the eastern Indian Ocean. Due to its strategic location and exposure to Indian Ocean forcing, Lampung Bay provides a representative setting to examine how different IOD phases modulate the hydrographic structure of coastal waters in western Indonesia, using ocean reanalysis data from the Copernicus Marine Environment Monitoring Service (CMEMS) covering the period 1993–2022. Analyses were conducted through time series evaluation, monthly climatology, vertical cross-sections, and identification of hydrographic characteristics associated with negative, neutral, and positive IOD phases. Cross-correlation analysis was employed to assess the time lag between the Dipole Mode Index (DMI) and oceanographic variables, while the Weibull distribution was applied to model the non-normal, positively skewed variability of temperature and salinity associated with extreme IOD conditions. The results show that sea temperature responds to IOD variability with a depth-dependent lag. The mixed layer exhibits a weak positive correlation (<i>r</i> = 0.26) at a lag of + 5 months, while the thermocline and deep layers respond almost simultaneously with stronger negative correlations (<i>r</i> = − 0.58 and − 0.60). This suggests delayed surface adjustment through atmospheric heat fluxes and rapid subsurface cooling linked to IOD-driven oceanic processes. Salinity responds more immediately to both positive and negative IOD phases, showing positive correlations at lag 0 in the mixed and thermocline layers (<i>r</i> = 0.21–0.35) and a slight lead in the deep layer (<i>r</i> = 0.40 at − 1 month). Despite moderate magnitudes, all correlations are statistically significant (<i>p</i> &lt; 0.05), confirming meaningful links between IOD forcing and hydrographic variability in Lampung Bay. Positive IOD phases were marked by a drop in surface temperature below 28.5&#xa0;°C and an increase in salinity above 33.5 PSU, linked to the intrusion of saline water masses from the Indian Ocean. In contrast, negative IOD phases were characterized by surface warming and a substantial decrease in salinity. Vertical profiles revealed thermocline and halocline shoaling during the JJA Seasons and positive IOD conditions. Coherence analysis further demonstrated a significant frequency-dependent coupling between the DMI and hydrographic variables, particularly within the 14–26-month sub-biennial band. These findings underscore the strong influence of basin-scale climate variability, such as the IOD, on the hydrographic dynamics of Lampung Bay, highlighting the need for sustained oceanographic in semi-enclosed tropical bays monitoring to better understand climate impacts on tropical coastal systems.</p>