Observations from the US Department of Energy's Atmospheric Radiation Measurement (ARM) program are used to evaluate the ability of the NASA GISS ModelE global climate model in reproducing observed interactions between aerosols and clouds. Included in the evaluation are comparisons of basic meteorology and aerosol properties, droplet activation, effective radius parameterizations, and surface‒based evaluations of aerosol‒cloud interactions (ACI). Differences between the simulated and observed ACI are generally large, but these differences may result partially from vertical distribution of aerosol in the model, rather than the representation of physical processes governing the interactions between aerosols and clouds. Compared to the current observations, the ModelE often features elevated droplet concentrations for a given aerosol concentration, indicating that the activation parameterizations used may be too aggressive. Additionally, parameterizations for effective radius commonly used in models were tested using ARM observations, and there was no clear superior parameterization for the cases reviewed here. This lack of consensus is demonstrated to result in potentially large, statistically significant differences to surface radiative budgets, should one parameterization be chosen over another.