The mean climate and its variability are analyzed in a suite of numerical experiments with a fully coupled general circulation model in which subgrid-scale moist convection is explicitly represented through embedded 2D cloud-system resolving models. Control simulations forced by the present day, fixed atmospheric carbon dioxide concentration are conducted using two horizontal resolutions and validated against observations and reanalyses. The mean state simulated by the higher resolution configuration has smaller biases. Climate variability also shows some sensitivity to resolution but not as uniform as in the case of mean state. The interannual and seasonal variability are better represented in the simulation at lower resolution whereas the subseasonal variability is more accurate in the higher resolution simulation. The equilibrium climate sensitivity of the model is estimated from a simulation forced by an abrupt quadrupling of the atmospheric carbon dioxide concentration. The equilibrium climate sensitivity temperature of the model is 2.77 °C, and this value is slightly smaller than the mean value (3.37 °C) of contemporary models using conventional representation of cloud processes. The climate change simulation forced by the representative concentration pathway 8.5 scenario projects an increase in the frequency of severe droughts over most of the North America.