The effective climate sensitivity in the Department of Energy’s Energy Exascale Earth System Model (E3SM) has decreased from 5.3 K in version 1 to 4.0 K in version 2. This reduction is mainly due to a weaker positive cloud feedback that leads to a stronger negative radiative feedback. Present-day atmosphere-only experiments with uniform 4 K sea surface temperature warming are used to separate the contributions of individual model modifications to the reduced cloud feedback. We find that the reduced cloud feedback is mostly driven by changes over the tropical marine low cloud regime, mainly related to a new trigger function for the deep convection scheme and modifications in the cloud microphysics scheme. The new trigger function helps weaken the low cloud reduction by increasing the cloud water detrainment at low levels from deep convection under warming. Changes to the formula of autoconversion rate from liquid to rain and an introduced minimum cloud droplet number concentration threshold in cloud microphysical calculations help sustain clouds against dissipation by suppressing precipitation generation with warming. In the midlatitudes, the increased Wegener-Bergeron-Findeisen (WBF) efficiency strongly reduces present-day liquid water and leads to a stronger negative cloud optical depth feedback. The reduced trade cumulus cloud feedback in v2 is closer to estimates from recent observational and large-eddy modeling studies but might not be due to the right physical reasons. The reduced mid-latitude cloud feedback may be more plausible because more realistic present-day mixed-phase clouds are produced through the change in the WBF efficiency.