In climate models, the subgrid‐scale orography (SSO) parameterization imposes a blocked flow drag at low levels that is opposed to the local flow. In IPSL‐CM6A‐LR, an SSO lift force is also applied perpendicular to the local flow to account for the effect of locally blocked air in narrow valleys. Using IPSL‐CM6A‐LR sensitivity experiments, it is found that the tuning of both effects strongly impacts the atmospheric circulation. Increasing the blocking and reducing the lift lead to an equatorward shift of the Northern Hemisphere subtropical jet and a reduction of the midlatitude eddy‐driven jet speed. It also improves the simulated synoptic variability, with a reduced storm‐track intensity and increased blocking frequency over Greenland and Scandinavia. Additionally, it cools the polar lower troposphere in boreal winter. Transformed Eulerian Mean diagnostics also show that the low‐level eddy‐driven subsidence over the polar region is reduced consistent with the simulated cooling. The changes are amplified in coupled experiments when compared to atmosphere‐only experiments, as the low‐troposphere polar cooling is further amplified by the temperature and albedo feedbacks resulting from the Arctic sea ice growth. In IPSL‐CM6A‐LR, this corrects the warm winter bias and the lack of sea ice that were present over the Arctic before adjusting the SSO parameters. Our results, therefore, suggest that the adjustment of SSO parameterization alleviates the Arctic sea ice bias in this case. However, the atmospheric changes induced by the parametrized SSO also impact the ocean, with an equatorward shift of the Northern Hemisphere oceanic gyres and a weaker Atlantic meridional overturning circulation.