Glacial/interglacial changes in Southern Ocean’s air-sea gas exchange have been considered as important mechanisms contributing to the glacial/interglacial variability in atmospheric CO2. Hence, understanding past variability in Southern Ocean intermediate to deep water chemistry and circulation is fundamental to constrain the role of these processes on modulating glacial/interglacial changes in the global carbon cycle. Our study focused on the glacial/interglacial variability in the vertical extent of southwest Pacific Antarctic Intermediate Water (AAIW). We compared carbon and oxygen isotope records from epibenthic foraminifera of sediment cores bathed in modern AAIW and Upper Circumpolar Deep Water (UCDW; 943–2066 m water depth) to monitor changes in water mass circulation spanning the past 350,000 years. We propose that pronounced freshwater input by melting sea ice into the glacial AAIW significantly hampered the downward expansion of southwest Pacific AAIW, consistent with climate model results for the Last Glacial Maximum. This process led to a pronounced upward displacement of the AAIW-UCDW interface during colder climate conditions and therefore to an expansion of the glacial carbon pool.