Abstract Marine stratocumulus (Sc) clouds exert a strong cooling effect on climate by reflecting solar radiation, yet many climate models underestimate their amount and cause uncertainty in equilibrium climate sensitivity (ECS). Herein, we show that incorporating a physically based Sc parameterization into the seventh version of the Model for Interdisciplinary Research on Climate (MIROC7) alleviates this long‐standing bias. This scheme diagnoses the estimated cloud‐top entrainment index to regulate atmospheric mixing near inversion layers, thereby improving the simulations of low‐level clouds (LLCs) over eastern subtropical oceans compared with the previous version, MIROC6, and the Coupled Model Intercomparison Project (CMIP) models. The new scheme strengthens positive low‐cloud feedback through a larger decrease in LLCs with climate warming, contributing to a higher climate sensitivity. The radiative feedback induced by the Sc scheme is about 0.24 W m−2 K−1, accounting for roughly half of the ECS difference between MIROC6 and MIROC7.