This paper compares the results of a local and a nonlocal scheme for vertical diffusion in the atmospheric boundary layer (ABL) within the context of the NCAR Community Climate Model, version 2 (CCM2). The local diffusion scheme uses an eddy diffusivity determined independently at each point in the vertical based on local vertical gradients of wind and virtual potential temperature, while the nonlocal scheme determines an eddy-diffusivity profile based on a diagnosed boundary-layer height and a turbulent velocity scale. It also incorporates nonlocal (vertical) transport effects for heat and moisture. The two schemes are compared with independent radiosonde observations for various locations, focusing on temperature and humidity structure over ocean where surface temperatures are specified. The nonlocal scheme transports moisture away from the surface more rapidly than the local scheme, leading to higher levels of moisture deposition. The local scheme tends to saturate the lowest model levels unrealistically, which can result in convective loss in the atmosphere. The nonlocal scheme is chosen for CCM2 because it represents important physical effects not contained in the local-K approach, such as the nonlocal transport effects in dry convective conditions. The impact of the nonlocal ABL scheme on global-climate simulations is documented, showing systematic differences with the local-K approach. The nonlocal scheme produces a warmer lower troposphere, drier lowest model levels, and a more realistic cloud distribution compared to the local-K scheme. The paper also discusses the boundary-layer height, which is explicitly diagnosed in the nonlocal scheme. The mean boundary-layer heights are generally small (<1000 m) over the Southern Hemisphere continents and islands, while they are larger over tropical and midlatitude oceans. The diurnal variation of the boundary-layer height is significant over land points, especially in regions like the Sahara desert, where it can reach up to 4 km. In conclusion, the nonlocal ABL scheme provides a more comprehensive representation of the physics of boundary-layer transport in dry convective conditions, leading to more realistic simulations of temperature, specific humidity, and cloud distribution.This paper compares the results of a local and a nonlocal scheme for vertical diffusion in the atmospheric boundary layer (ABL) within the context of the NCAR Community Climate Model, version 2 (CCM2). The local diffusion scheme uses an eddy diffusivity determined independently at each point in the vertical based on local vertical gradients of wind and virtual potential temperature, while the nonlocal scheme determines an eddy-diffusivity profile based on a diagnosed boundary-layer height and a turbulent velocity scale. It also incorporates nonlocal (vertical) transport effects for heat and moisture. The two schemes are compared with independent radiosonde observations for various locations, focusing on temperature and humidity structure over ocean where surface temperatures are specified. The nonlocal scheme transports moisture away from the surface more rapidly than the local scheme, leading to higher levels of moisture deposition. The local scheme tends to saturate the lowest model levels unrealistically, which can result in convective loss in the atmosphere. The nonlocal scheme is chosen for CCM2 because it represents important physical effects not contained in the local-K approach, such as the nonlocal transport effects in dry convective conditions. The impact of the nonlocal ABL scheme on global-climate simulations is documented, showing systematic differences with the local-K approach. The nonlocal scheme produces a warmer lower troposphere, drier lowest model levels, and a more realistic cloud distribution compared to the local-K scheme. The paper also discusses the boundary-layer height, which is explicitly diagnosed in the nonlocal scheme. The mean boundary-layer heights are generally small (<1000 m) over the Southern Hemisphere continents and islands, while they are larger over tropical and midlatitude oceans. The diurnal variation of the boundary-layer height is significant over land points, especially in regions like the Sahara desert, where it can reach up to 4 km. In conclusion, the nonlocal ABL scheme provides a more comprehensive representation of the physics of boundary-layer transport in dry convective conditions, leading to more realistic simulations of temperature, specific humidity, and cloud distribution.