A two-moment Morrison-Gettelman bulk cloud microphysics with prognostic precipitation (MG2), together with a mineral dust and temperature-dependent ice nucleation scheme, have been implemented into the Geophysical Fluid Dynamics Laboratory's Atmosphere Model version 4.0 (AM4.0). We refer to this configuration as AM4-MG2. This paper describes the configuration of AM4-MG2, evaluates its performance, and compares it with AM4.0. It is shown that the global simulations with AM4-MG2 compare favorably with observations and reanalyses. The model skill scores are close to AM4.0. Compared to AM4.0, improvements in AM4-MG2 include (a) better coastal marine stratocumulus and seasonal cycles, (b) more realistic ice fraction, and (c) dominant accretion over autoconversion. Sensitivity tests indicate that nucleation and sedimentation schemes have significant impacts on cloud liquid and ice water fields, but higher horizontal resolution (about 50 km instead of 100 km) does not.