Abstract Ocean mesoscale thermal feedback (TFB) is the influence of mesoscale sea surface temperature (SST) anomalies on the overlying atmosphere and its feedback to the ocean. Over the past few decades, TFB has been shown to affect the atmosphere by inducing low-level wind and surface stress anomalies and modulating ocean–atmosphere heat fluxes ubiquitously over the global oceans. These anomalies can alter the climate variability. However, it is not clear yet to what extent heat and momentum flux anomalies modulate the mesoscale ocean activity. Here, using coupled ocean–atmosphere mesoscale simulations over a realistic subtropical channel centered on the equator in which the TFB can be turned off by spatially smoothing the SST as seen by the atmosphere, we show that TFB can damp the mesoscale activity, with a more pronounced effect near the surface. This damping appears to be sensitive to the cutoff filter used: on average, the surface mesoscale activity is attenuated by 9% when smoothing the SST using an ∼1000-km cutoff but by only 2% when using an ∼350-km cutoff. We demonstrate that the mesoscale activity damping is primarily caused by a sink of available eddy potential energy that is controlled by the induced-anomalous heat fluxes, the surface stress anomalies having a negligible role. When TFB is neglected, the absence of sink of potential energy is partly compensated by a more negative eddy wind work. We illustrate that TFB filtering in a coupled model must be done carefully because it can also impact the large-scale meridional SST gradients and subsequently the mean large-scale wind stress curl and ocean dynamics.