Ice nucleation in mixed-phase clouds has recently been identified as a critical factor in projections of future climate. Here we explore how this process influences climate sensitivity using the Community Earth System Model 2 (CESM2). We find that ice nucleation affects simulated cloud feedbacks over most regions and levels of the troposphere, not just extratropical low clouds. Ice nucleation’s impact on climate sensitivity is found to primarily operate through this process’s role setting global-scale cloud phase. Conversely, whether ice nucleation is treated as aerosol-sensitive is of limited importance. In satellite-constrained model experiments, dissimilar ice nucleation realizations all result in a strongly positive total cloud feedback, as in the default CESM2. A microphysics update from CESM1 to CESM2 had substantially weakened ice nucleation, due partly to a model issue. Our findings suggest that this contributed to increased climate sensitivity by reducing global cloud phase bias, resulting in more realistic mixed-phase clouds.