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In the past decade, dynamical downscaling using “pseudo‐global‐warming” (PGW) techniques has been applied frequently to project regional climate change. Such techniques generate signals by adding mean global climate model (GCM)‐simulated climate change signals in temperature, moisture, and circulation to lateral and surface boundary conditions derived from reanalysis. An alternative to PGW is to downscale GCM data directly. This technique should be advantageous, especially for simulation of extremes, since it incorporates the GCM's full spectrum of changing synoptic‐scale dynamics in the regional solution. Here, we test this assumption, by comparing simulations in Europe and Western North America. We find that for warming and changes in temperature extremes, PGW often produces similar results to direct downscaling in both regions. For mean and extreme precipitation changes, PGW generally also performs surprisingly well in many cases. Moisture budget analysis in the Western North America domain reveals why. Large fractions of the downscaled hydroclimate changes arise from mean changes in large‐scale thermodynamics and circulation, that is, increases in temperature, moisture, and winds, included in PGW by design. The one component PGW may have difficulty with is the contribution from changes in synoptic‐scale variability. When this component is large, PGW performance could be degraded. Global analysis of GCM data shows there are regions where it is large or dominant. Hence, our results provide a road map to identify, through GCM analyses, the circumstances when PGW would not be expected to accurately regionalize GCM climate signals.