AbstractThe Luzon Undercurrent (LUC) is one of the most significant western boundary undercurrents in the northern western Pacific Ocean (WPO), essential for subsurface water transport and connecting subtropical–equatorial circulations. Over the last three decades, abundant observational progress has been made in revealing the basic features of the LUC. However, the dynamics and thus successful modeling of the LUC remain unresolved. In this work, we conducted a high‐resolution (3 km, 60 levels) numerical investigation of the WPO circulation using the China sea multi‐scale ocean modeling system. We paid particular attention to the vertical mixing, aiming to reasonably resolve the LUC by modifying the vertical mixing parameterization. Based on physics reasoning and experiments of physically based modeling, we designed an adaptive mixing scheme (AMS), which used a Munk‐like function in the thermocline for enhanced vertical mixing in the areas of small Richardson numbers. Using the AMS, we reproduced the two‐layer WPO circulations well and captured the inshore component of the LUC consistent with observations. Furthermore, we studied the dynamics of the LUC by analyzing the momentum balance and found that the LUC is primarily maintained by baroclinic pressure gradient force due to strong thermocline tilting near the western boundary. Enhanced vertical mixing in this highly sheared region crucially provides sufficient geostrophic support to sustain the LUC. Also, nonlinearity and submesoscale motions contribute positively to the LUC. This work advances physical understanding of the current‐undercurrent system and improves numerical capability in capturing the LUC and WPO circulations.