A model of the thermodynamic structure of the trade wind boundary layer is formulated to include the parameterization of precipitation in relatively shallow clouds. Although the area-averaged simulated precipitation rates are relatively small (less than 1 mm/day), the inclusion of precipitation has an appreciable effect on the predicted thermodynamic structure. The cloud layer structure simulated with precipitation is warmer, drier, and more stable than that simualted without precipitation. The simulated inversion height is lowered by as much as 60 mbar when precipitation is included.