A set of general circulation model simulations is analyzed to determine how cloud distribution and cloud radiative properties might change as climate warms and to isolate and quantify the various feedback effects of clouds on climate sensitivity. For this study the NCAR Community Climate Model (CCM1) was modified so that the cloud radiative properties (albodo, emissivity, and absorptivity) are no longer prescribed, but are functions of the cloud liquid water content. Following the Cess and Potter approach for estimating climate sensitivity, we consider results from two sets of simulations. In one set, cloud liquid water is diagnosed from the simulated condensation rate and thus is free to vary with condensation, while in the other set, the cloud liquid water content is a fixed field (dependent only on altitude and latitude) that is obtained by averaging the results of the first set of experiments. The experiments make it possible to isolate the effects of cloud liquid water feedback. We find that changes in cloud amount, cloud liquid water content, and cloud distribution (especially in the vertical) are all of comparable importance, but some of these changes provide a positive feedback while others provide a negative feedback. Separation of cloud feedback into individual components makes it clear that in this model as climate warms the general increase in the liquid water content of each cloud layer is partially offset by an upward shift in cloud altitude. The effects of clouds on longwave radiation also generally tend to cancel the effects on shortwave radiation. Consequently, the net cloud feedback represents a residual of several offsetting effects, which nevertheless is large enough to nearly double the sensitivity of the simulated climate. Another important conclusion is that it is impossible to parameterize cloud albedo in terms of average cloud liquid water content because the average liquid water is dominated by the thicker clouds, whereas the average albedo depends on clouds with relatively little liquid water as well.