The cyclonic-anticyclonic-cyclonic (CAC) circulation in the upper (<750 m)-middle (750–1,500 m)-deep (>1,500 m) layers of South China Sea (SCS) is mainly driven by the extrinsic lateral vorticity flux due to inflow-outflow-inflow through the Luzon Strait (LS) and the associated intrinsic vertical exchange (VE) in the basin. The contribution of spatiotemporal structure of the VE through vortex stretching and squeezing to CAC circulation, which was unknown, mainly occurs in the semi-closed middle and deep layers and has a strong seasonality. During summer, the vorticity flux induced by net upward VEs crossing the upper (750 m) and lower (1,500 m) interfaces of CAC circulation is equivalent to ~40% of the lateral vorticity flux for strengthening the anticyclonic and cyclonic circulation in the middle and deep layers, respectively. During winter, the net downward VE crossing the upper interface squeezes the middle layer and strengthens its anticyclonic circulation, while the net VE crossing the lower interface is too small to affect the circulation. The VE and its seasonality in the basin are largely governed by the cross-isobath geostrophic transport (CGTb) due to interaction between along-isobath circular currents and rugged slope topography. The CGTb is formed by the along-isobath bottom pressure gradient associated with surface wind stress curl, nonlinear advection, and beta effect over the meandering slope topography. Our study revealed how important VE between the layers is to the CAC circulation itself, and our work advanced the understanding of the intrinsic-extrinsic dynamic coupling that forms, develops, and sustains the CAC circulation in the SCS.