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The El Niño Southern Oscillation plays a key role in modulating interannual rainfall variability in Mexico. While El Niño events are linked to drought in Mexico, uncertainty exists about the spatial pattern and causal mechanisms behind El Niño-induced drought. We use lead/lag correlation analysis of rainfall station data to identify the spatial pattern of drought associated with the summer before, and the spring following, the peak of warm SST anomalies in the eastern equatorial Pacific. We also use atmospheric fields from the North American Regional Reanalysis to calculate the anomalous moisture budget and diagnose the mechanisms associated with El Niño-induced drought in Mexico. We find that reduced rainfall occurs in Mexico in both the summer before and the spring after a peak El Niño event, especially in regions of climatologically strong convection. The teleconnection in the developing phase of El Niño is primarily driven by changes in subsidence resulting from anomalous convection in the equatorial Pacific. The causes of drought during the decaying phase of El Niño events are varied: in some years, descent anomalies dominate other moisture budget terms, while in other years, drying of the boundary layer on the Mexican plateau is important. We suggest that the latter may result from the interaction of weakened southeasterly winds in the Intra-Americas Sea with high topography along the Atlantic coast of Mexico. Weakened winds are likely driven by a reduced sea level pressure gradient between the Atlantic and the Pacific. Changes in easterly wave activity may contribute to drought in the developing phase of El Niño, but may be less important in the decaying phase of El Niño.