Despite the recently reported beginning of a recovery in global stratospheric ozone (O 3 ), an unexpected O 3 decline in the tropical mid-stratosphere (around 30–35 km altitude) was observed in satellite measurements during the first decade of the 21st century. We use SCanning Imaging Absorption SpectroMeter for Atmospheric CHartographY (SCIAMACHY) measurements for the period 2004–2012 to confirm the significant O 3 decline. The SCIAMACHY observations also show that the decrease in O 3 is accompanied by an increase in NO 2 . To reveal the causes of these observed O 3 and NO 2 changes, we performed simulations with the TOMCAT 3D Chemistry-Transport Model (CTM) using different chemical and dynamical forcings. For the 2004–2012 time period, the TOMCAT simulations reproduce the SCIAMACHY-observed O 3 decrease and NO 2 increase in the tropical mid-stratosphere. The simulations suggest that the positive changes in NO 2 (around 7 % per decade) are due to similar positive changes in reactive odd nitrogen (NO y ), which are a result of a longer residence time of the source gas N 2 O and increased production via N 2 O + O( 1 D). The model simulations show a negative change of 10 % per decade in N 2 O that is most likely due to variations in the deep branch of the Brewer-Dobson Circulation (BDC). Interestingly, modelled annual mean age-of-air (AoA) does not show any significant changes in the transport in the tropical mid-stratosphere during 2004–2012. However, further analysis of model results demonstrate significant seasonal variations. During the autumn months (September–October) there are positive AoA changes, that imply transport slowdown and a longer residence time of N 2 O allowing larger conversion to NO y which enhances O 3 loss. During winter months (January–February) there are negative AoA changes, indicating faster N 2 O transport and less NO y production. Although the changes in AoA cancel out when averaging over the year, non-linearities in the chemistry-transport interactions mean that the net negative N 2 O change remains.