In this study, we have used physical parameterizations to improve the CGCM simulation of the SST diurnal cycle in the world oceans. For this purpose, we implemented two parameterization schemes of the diurnal mixed layer, designed by Zeng and Beljaars (2005) and Schiller and Godfrey (2005) respectively, to the operational Climate Forecast System (CFS) developed by National Center for Environmental Prediction (NCEP). Both parameterization schemes were fully tested in CFS. A series of multi-year simulations and several sensitivity experiments have been conducted. The SST diurnal cycle from both simulations have been compared with TOGA/COARE observations and daily SST diurnal amplitude estimated from ISCCP and SSM/I observations. Our results show that the CFS with the parameterized diurnal mixed layer can reproduce the characteristics of the spatial pattern and temporal variation of SST diurnal cycle to a large extent, which is significantly improved from the CFS simulation without diurnal mixed layer parameterization. Using the improved CFS simulations, the diurnal SST effects on the mean state and low frequency variability have been analyzed. In particular, its effects on the atmospheric intraseasonal oscillation have been examined through a comparison of the error patterns of the model simulations with observations and among model experiments. The possible mechanisms about the interaction between SST diurnal variability and tropical atmospheric intraseasonal variability have been discussed.