To better represent partial cloudiness in subsaturated grid volumes under a variety of conditions, an upgraded statistical cloud parameterization within the Mellor–Yamada–Nakanishi–Niino (MYNN) planetary boundary layer (PBL) scheme has been tested. This scheme is generally found to “activate” more robustly in areas of small cloud fraction, including subgrid stratus, and is able to realistically produce continuously varying (i.e., non-binary) cloud fractions. Importantly, this upgraded cloud scheme is fully coupled to the radiation parameterization, thereby providing a conduit for cloud–radiative interaction in the absence of resolved-scale clouds or parameterized convective clouds. Finally, use of this upgraded cloud scheme in the RAP and HRRR may permit the implementation of a cloud-ceiling diagnostic based solely on the model cloud fraction, allowing for a simplified postprocessing algorithm and more accurate ceiling forecasts. Model verification results from retrospective simulations and selected case studies will be shown to illustrate these performance improvements in the RAP and HRRR for low cloud ceilings forecasts relevant to aviation operations.