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In contrast to the large volume of studies on the impact of horizontal resolution in oceanic general circulation models (OGCMs), the impact of vertical resolution has been largely overlooked and there is no consensus on how one should construct the vertical grid to represent the vertical structure of the baroclinic modes as well as the distribution of distinct water masses throughout the global ocean. In this paper, we document the importance of vertical resolution in the representations of vertical modes and water masses in the North Atlantic and show i) that vertical resolution is unlikely to undermine the resolution capability of the horizontal grid in representing the vertical modes and a 32-layer isopycnal configuration is adequate to represent the first five baroclinic modes in mid-latitudes and ii) that vertical resolution should focus on representing water masses. A coarse vertical resolution (16-layer) simulation exhibits virtually no transport in the dense overflow water which leads to a weaker and significantly shallower Atlantic meridional overturning circulation (AMOC) despite resolving the first baroclinic mode throughout the domain, whereas there are overall very small differences in the subtropical and subpolar North Atlantic circulation in the simulations with finer vertical resolution (24 to 96 layers). We argue that accurately representing the water masses is more important than representing the baroclinic modes for an OGCM in modeling the low-frequency large-scale circulation.