AbstractTo improve confidence in regional projections of future climate, a new dynamical downscaling (NDD) approach with both general circulation model (GCM) bias corrections and spectral nudging is developed and assessed over North America. GCM biases are corrected by adjusting GCM climatological means and variances based on reanalysis data before the GCM output is used to drive a regional climate model (RCM). Spectral nudging is also applied to constrain RCM‐based biases. Three sets of RCM experiments are integrated over a 31 year period. In the first set of experiments, the model configurations are identical except that the initial and lateral boundary conditions are derived from either the original GCM output, the bias‐corrected GCM output, or the reanalysis data. The second set of experiments is the same as the first set except spectral nudging is applied. The third set of experiments includes two sensitivity runs with both GCM bias corrections and nudging where the nudging strength is progressively reduced. All RCM simulations are assessed against North American Regional Reanalysis. The results show that NDD significantly improves the downscaled mean climate and climate variability relative to other GCM‐driven RCM downscaling approach in terms of climatological mean air temperature, geopotential height, wind vectors, and surface air temperature variability. In the NDD approach, spectral nudging introduces the effects of GCM bias corrections throughout the RCM domain rather than just limiting them to the initial and lateral boundary conditions, thereby minimizing climate drifts resulting from both the GCM and RCM biases.