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The representation of aerosol activation into cloud droplets in climate models is important for accurate understanding of aerosol radiative impacts on the Arctic climate, but it remains highly uncertain. Here we show that the uncertainty range of subgrid vertical velocity (SVV) and maximum supersaturation (SSmax) in aerosol activation produces fourfold to fivefold differences in the direct radiative effect of black carbon (BC) in the Arctic (0.091–0.40 W m−2) because SVV and SSmax determine the activated fraction and wet removal efficiency of aerosols. Aerosols are particularly sensitive to SVV in remote regions but not near their sources because many aerosols near sources are not yet influenced by wet removal processes. Our results demonstrate that SVV treatment is a major source of uncertainty in Arctic aerosol simulations and may be key for reducing the large discrepancies among global models in estimates of BC and its radiative effects in the Arctic. Plain Language Summary: Black carbon aerosol, emitted mainly in midlatitude regions by combustion of fossil fuel and biomass, is transported to the Arctic and deposited on snow and ice surfaces, where it contributes to Arctic heating. However, estimates of its importance in Arctic warming have large uncertainties. Because global climate models usually use a coarse horizontal grid spacing, they rely on many assumptions to represent the small‐scale atmospheric processes within clouds. This study uses a global climate model to investigate the importance of one of these assumptions, the treatment of "subgrid vertical velocity," to aerosol simulations. We show that varying the subgrid vertical velocity within its uncertainty range changes the calculated heating effect of black carbon in the Arctic by as much as five times. Our results underscore the importance of treating subgrid vertical velocity treatment accurately in estimating how much black carbon from midlatitudes is warming the Arctic. Key Points: The importance of subgrid vertical velocity in activation to aerosol burden and radiative effects was investigated by using a global modelThe current uncertainty in subgrid vertical velocity produces fivefold differences in the radiative effect of black carbon in the ArcticThe subgrid treatment of updraft is important in estimating the long‐range transport of black carbon and its impacts on Arctic climate [ABSTRACT FROM AUTHOR]