Climatological properties for selected aspects of the thermodynamic structure and hydrologic cycle are presented from a 15-yr numerical simulation conducted with the National Center for Atmospheric Research Community Climate Model, version 3 (CCM3), using an observed sea surface temperature climatology. In most regards, the simulated thermal structure and hydrologic cycle represent a marked improvement when compared with earlier versions of the CCM. Three major modifications to parameterized physics are primarily responsible for the more notable improvements in the simulation: modifications to the diagnosis of cloud optical properties, modifications to the diagnosis of boundary layer processes, and the incorporation of a penetrative formulation for deep cumulus convection. The various roles of these physical parameterization changes will be discussed in the context of the simulation strengths and weaknesses.