Abstract A large, long-standing, and pervasive climate model bias is excessive absorbed shortwave radiation (ASR) over the midlatitude oceans, especially the Southern Ocean. This study investigates both the underlying mechanisms for and climate impacts of this bias within the Community Earth System Model, version 1, with the Community Atmosphere Model, version 5 [CESM1(CAM5)]. Excessive Southern Ocean ASR in CESM1(CAM5) results in part because low-level clouds contain insufficient amounts of supercooled liquid. In a present-day atmosphere-only run, an observationally motivated modification to the shallow convection detrainment increases supercooled cloud liquid, brightens low-level clouds, and substantially reduces the Southern Ocean ASR bias. Tuning to maintain global energy balance enables reduction of a compensating tropical ASR bias. In the resulting preindustrial fully coupled run with a brighter Southern Ocean and dimmer tropics, the Southern Ocean cools and the tropics warm. As a result of the enhanced meridional temperature gradient, poleward heat transport increases in both hemispheres (especially the Southern Hemisphere), and the Southern Hemisphere atmospheric jet strengthens. Because northward cross-equatorial heat transport reductions occur primarily in the ocean (80%), not the atmosphere (20%), a proposed atmospheric teleconnection linking Southern Ocean ASR bias reduction and cooling with northward shifts in tropical precipitation has little impact. In summary, observationally motivated supercooled liquid water increases in shallow convective clouds enable large reductions in long-standing climate model shortwave radiation biases. Of relevance to both model bias reduction and climate dynamics, quantifying the influence of Southern Ocean cooling on tropical precipitation requires a model with dynamic ocean heat transport.