Rain formation is a critical factor governing the lifecycle and radiative forcing of clouds and therefore it is a key element of weather and climate. Cloud microphysics–turbulence interactions occur across a wide range of scales and are challenging to represent in atmospheric models with limited resolution. Based on past experiments and idealized numerical simulations, it has been postulated that cloud turbulence accelerates rain formation by enhancing drop collision–coalescence. We provide substantial evidence for significant impacts of turbulence on the evolution of cloud droplet size distributions and rain formation by comparing high-resolution observations of cumulus congestus clouds with state-of-the-art large-eddy simulations coupled with a Lagrangian particle-based microphysics scheme. Turbulent coalescence must be included in the model to accurately represent the observed drop size distributions, especially for drizzle drop sizes at lower heights in the cloud. Turbulence causes earlier rain formation and greater rain accumulation compared to simulations with gravitational coalescence only. The observed rain size distribution tail just above cloud base follows a power law scaling that deviates from theoretical scalings considering either a purely gravitation collision kernel or a turbulent kernel neglecting droplet inertial effects, providing additional evidence for turbulent coalescence in clouds. In contrast, large aerosols acting as cloud condensation nuclei (“giant CCN”) do not significantly impact rain formation owing to their long timescale to reach equilibrium wet size relative to the lifetime of rising cumulus thermals. Overall, turbulent drop coalescence exerts a dominant influence on rain initiation in warm cumulus clouds, with limited impacts of giant CCN.