It is still challenging to reproduce marine boundary layer (MBL) clouds well in large-scale models despite their importance to the Earth’s radiation budget and hydrological cycle. This study evaluates MBL and clouds in the Energy Exascale Earth System Model (E3SM) version 2. The E3SM simulation results are compared with remote sensing and reanalysis data during the Cloud System Evolution in the Trades (CSET) field campaign to better understand stratocumulus to cumulus cloud transition (SCT) over the northeast Pacific. E3SM results are extracted along the CSET Lagrangian trajectories. The comparison shows that the E3SM simulation applying horizontal wind nudging performs well in reproducing thermodynamic variables of the MBL and evolution trends of cloud variables along the trajectories. However, substantial overestimations of aerosol and cloud drop number ($N_d$) are observed, which is explained as an issue with version 2 of the model. Cloud fraction (CF) does decrease from the Californian coast to Hawaii in the E3SM simulation, but most CF values indicate an overcast or almost clear sky, which differ with satellite and reanalysis data. The effect of $N_d$ overestimation on CF evolution is assessed via prescribed $N_d$ simulations. Those simulations with $N_d$ modifications show negligible CF changes. A comparison of estimated inversion strength (EIS) also shows that the simulated EIS values are similar to those of reanalysis data. Our study suggests that cloud macrophysics and boundary layer processes are more important in improving the simulation rather than improving the model’s dynamics or cloud microphysics to capture SCT better in the model.