A simple way to diagnose fractional cloud cover in general circulation models is to relate it to the simulated relative humidity, and allowing for fractional cloud cover above a “critical relative humidity” of less than 100%. In the formulation chosen here, this is equivalent to assuming a uniform “top-hat” distribution of subgrid-scale total water content with a variance related to saturation. Critical relative humidity has frequently been treated as a “tunable” constant, yet it is an observable. Here, this parameter, and its spatial distribution, is examined from Atmospheric Infrared Sounder (AIRS) satellite retrievals, and from a combination of relative humidity from the ECMWF Re-Analyses (ERA-Interim) and cloud fraction obtained from CALIPSO lidar satellite data. These observational data are used to evaluate results from different simulations with the ECHAM general circulation model (GCM). In sensitivity studies, a cloud feedback parameter is analyzed from simulations applying the original parameter choice, and applying parameter choices guided by the satellite data. Model sensitivity studies applying parameters adjusted to match the observations show larger positive cloud-climate feedbacks, increasing by up to 30% compared to the standard simulation.