This paper describes a modified formulation of stratiform condensation rate associated with fractional cloudiness in the Community Atmospheric Model Version 2 (CAM2). It introduces an equation to link cloudiness change with the variation of total condensate. Together with a diagnostic cloud relationship that represents subgrid-scale variability of relative humidity, a closed system is formed to calculate the fractional condensation rate. As a result, the new formulation eliminates the two closure assumptions in the Rasch and Kristjànsson  prognostic cloud scheme. It also extends the Sundqvist  scheme by including the influence of convective detrainment and advection of condensates on the fractional cloudiness. Comparison is made between the present formulation and the Rasch and Kristjànsson scheme by using data from the Atmospheric Radiation Measurement Program and through global model simulations with CAM2. It is shown that relative to the Rasch and Kristjànsson scheme, the new formulation produces less clouds and a slightly warmer troposphere, thus reducing the original cold bias in the National Center for Atmospheric Research (NCAR) Community Climate Model (CCM). Even though the overall impact of the new formulation on the model climate is small, the modifications lead to more consistent treatments of fractional cloudiness change, condensation rate, and cloud water change in the model.