Mesoscale features in the eastward extension of the Kuroshio were investigated using assimilation of TOPEX/POSEIDON (T/P) data into a three-layer quasi-geostrophic model. The T/P data exhibited an elongated state of the southern recirculation gyre in 1993–95 and 1997, between whose two periods the gyre had a contracted state in 1995–96. A few stationary eddies were located in the southern gyre during the contracted state. The baroclinic instability, which was indicated by the phase shift from the uppermost-to the lowest-layer anomalies toward the downstream side, was evident near the Kuroshio Extension (KE) path. Since the instability never appeared in the artificial model without bottom topography, the topographic barrier for the eastward flow in the lowest layer was a necessary condition for the instability. The instability synchronized with the transition in the western region of the KE axis from the elongated to the contracted states. This evolution was interpreted as if the baroclinic instability played some part in the KE states and was a trigger for the transition from the elongated to the contracted states.