AbstractA persistent shortwave radiative bias of Southern Ocean (SO) clouds in climate models is strongly associated with incorrect cloud phase representation, which impacts precipitation. Measurements characterizing precipitation in low‐level mixed‐phase clouds, which frequently form over the SO, are rare, and our understanding of precipitation efficacy within these clouds remains limited. The simulated surface precipitation bias has an indirect effect on determining global climate sensitivity and a direct impact on the hydrological cycle. This study investigates the representation of low clouds, cloud variability, and precipitation statistics over the SO in real‐case Icosahedral Nonhydrostatic (ICON) simulations at the kilometer scale. The simulations are contrasted with 48 hr of continuous shipborne observations of open and closed‐cell stratocumuli, south of Tasmania. Our simulations show the significance of heavily rimed particle formation, their in‐cloud growth, and subcloud melting to capture the observed cloud‐precipitation vertical structure. In addition, supercooled drizzle formation impacts the vertical structure and precipitation statistics. ICON captures the observed intermittency of precipitation even at a standard vertical resolution of 200 m in the boundary layer but only captures the observed sparse distribution of intense precipitation (>1 mm hr−1) when the maximum vertical resolution is reduced to 100 m. However, the simulations of the 2‐day accumulated precipitation and the radiative effect are largely insensitive to the vertical resolution. The cloud reflectivity of the broken cloud deck is underestimated due to negative biases in cloud optical depth.