Cloud processes are the largest source of uncertainty in quantifying the global temperature response to CO2 rise. Still, the role of precipitation efficiency (PE) – surface rain per unit column-integrated condensation – is yet to be quantified. Here we use 36 limited-domain cloud resolving simulations from the Radiative-Convective Equilibrium Model Intercomparison Project to show that they strongly imply climate warming will result in increases to net precipitation efficiency. We then analyze 35 General Circulation Models (GCMs) from the Coupled Model Intercomparison Project Phase 6 and find that increasing PE enhances tropical circulation slowdown and strengthens eastern equatorial Pacific warming. These changes trigger pan-tropical positive cloud feedback by causing stratiform anvil cloud reduction and stratocumulus suppression, and thereby amplify overall climate sensitivity. Quantitatively, we find that in the 24 of 35 GCMs which match the cloud-resolving models in simulating increasing PE with greenhouse warming, mean Effective Climate Sensitivity is 1 K higher than in GCMs in which PE decreases. The models simulating increasing PE also comprise all estimates of effective climate sensitivity over 4 K. Taken together, these results show that further constraining PE sensitivity to warming will reduce uncertainty over future climate change.