A new release of the Max Planck Institute for Meteorology Earth System Model version 1.2 (MPI‐ESM1.2) is presented. The development focused on correcting errors in and improving the physical processes representation, as well as improving the computational performance, versatility, and overall user friendliness. In addition to new radiation and aerosol parameterizations of the atmosphere, several relatively large, but partly compensating, coding errors in the model's cloud, convection, and turbulence parameterizations were corrected. The representation of land processes was refined by introducing a multilayer soil hydrology scheme, extending the land biogeochemistry to include the nitrogen cycle, replacing the soil and litter decomposition model and improving the representation of wildfires. The ocean biogeochemistry now represents cyanobacteria prognostically in order to capture the response of nitrogen fixation to changing climate conditions and further includes improved detritus settling and numerous other refinements. As something new, in addition to limiting drift and minimizing certain biases, the instrumental record warming was explicitly taken into account during the tuning process. To this end, a very high climate sensitivity of around 7 K caused by low‐level clouds in the tropics as found in an intermediate model version was addressed, as it was not deemed possible to match observed warming otherwise. As a result, the model has a climate sensitivity to a doubling of CO2 over preindustrial conditions of 2.77 K, maintaining the previously identified highly nonlinear global mean response to increasing CO2 forcing, which nonetheless can be represented by a simple two‐layer model.