The accurate treatment of clouds and their radiative properties is wid
ely regarded to be among the most important problems facing global cli
mate modeling. A number of the more serious systematic simulation bias
es in the NCAR Community Climate Model (CCM2) appear to be related to
deficiencies in the treatment of cloud optical properties. In this pap
er, a simple diagnostic parameterization for cloud liquid water is pre
sented. The sensitivity of the simulated climate to this alternative f
ormulation, both in terms of mean climate metrics and measures of the
climate system response, is illustrated. Resulting simulations show si
gnificant reductions in CCM2 systematic biases, particularly with resp
ect to surface temperature, precipitation, and extratropical geopotent
ial height-field anomalies. Many aspects of the simulated response to
ENSO forcing are also substantially improved.