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Recent analyses of global climate models suggest that uncertainty in the coupling between midlatitude clouds and the atmospheric circulation contributes to uncertainty in climate sensitivity. However, the reasons behind model differences in the cloud–circulation coupling have remained unclear. Here, we use a global climate model in an idealized aquaplanet setup to show that the Southern Hemisphere climatological circulation, which in many models is biased equatorward, contributes to the model differences in the cloud–circulation coupling. For the same poleward shift of the Hadley cell (HC) edge, models with narrower climatological HCs exhibit stronger midlatitude cloud-induced shortwave warming than models with wider climatological HCs. This cloud-induced radiative warming results predominantly from a subsidence warming that decreases cloud fraction and is stronger for narrower HCs because of a larger meridional gradient in the vertical velocity. A comparison of our aquaplanet results with comprehensive climate models suggests that about half of the model uncertainty in the midlatitude cloud–circulation coupling stems from this impact of the circulation on the large-scale temperature structure of the atmosphere, and thus could be removed by improving the climatological circulation in models. This illustrates how understanding of large-scale dynamics can help reduce uncertainty in clouds and their response to climate change.