We report on our implementation of EULAG as a dynamical core in the Community Atmospheric Model (CAM). EULAG is a non-hydrostatic, parallel computational model for all-scale geophysical flows. EULAG’s name derives from its two computational options: EULerian (flux form) or semi-LAGrangian (advective form). The model combines nonoscillatory forward-in-time (NFT) numerical algorithms with a robust elliptic Krylov solver. A signature feature of EULAG is that it is formulated in generalized coordinates. In particular, this enables grid adaptivity. In total, these features give EULAG novel advantages over the existing dynamical cores in CAM. This paper uses a series of aqua-planet simulations to demonstrate that CAM-EULAG results compare favorably with those from CAM simulations at standard CAM resolution that use current finite volume or Eulerian-spectral dynamical core options. We also show that the grid adaptivity implemented in CAM3-EULAG allows higher resolution in selected regions without causing anomalous behavior such as spurious wave reflection.