Aerosol-cloud interactions remain one of the largest uncertainties in climate projections. These interactions occur at sub-grid scales in all but the highest resolution atmospheric models. Problems in the description of these interactions are believed to lead to high estimates of cloud susceptibility to aerosol and the underestimation of aerosol concentrations in remote regions such as the Arctic, in global models. In this study, we use the Community Atmosphere Model Version 5 (CAM5) running in the ‰ÛÏspecified dynamics‰Û mode (SD-CAM5) at grid spacing of 2, 1, 1/2, and 1/4 degrees, using the very high-resolution Year Of Tropical Convection (YOTC) analysis to constrain the model meteorology to explore the resolution dependence of the model physics contributing to the biases. We found that the local moisture convergence is much stronger in the high-resolution simulation, producing a higher frequency of occurrence of cloud-free and dense cloud conditions as opposed to partial cloudiness often present in low-resolution simulations, which then results in differences in microphysical process rates (i.e., accretion and autoconversion). The sensitivity of clouds to resolution leads to differences in aerosol lifetime and poleward transport, which increases by about 50% in the highest resolution simulation, because synoptic scale eddies and the associated aerosol filaments are better-resolved. The model bias of high estimates of cloud susceptibility to aerosols is also reduced with increasing resolution, as evaluated by A-Train satellite retrievals. These improvements lead to a reduction in the model estimate of aerosol indirect forcing, and a stronger aerosol invigoration effect that strengthens the Pacific storm track. Many of the aerosol-cloud interactions remain subgrid scale even at the high resolutions we explore here, and this is only a partial solution to the improved treatment of aerosols and clouds in climate models but the differences are important and suggest that increases in model resolution will affect estimates of the impact of aerosols on climate and weather.