We use large eddy simulations of smoke‐cloud interactions to demonstrate the relative importance of various factors responsible for cloud suppression in the biomass burning regions of Amazonia. The model includes unprecedented treatment of coupled smoke aerosol‐cloud‐radiative feedbacks in a 3‐dimensional model that resolves scales of ∼100s m. It is shown that the vertical distribution of smoke aerosol in the convective boundary layer is crucial to determining whether cloudiness is reduced; Smoke aerosol emitted at the surface in a daytime convective boundary layer may reduce or increase cloudiness whereas smoke aerosol residing in the layer where clouds tend to form will reduce cloudiness. On the other hand, the reduction in surface latent and sensible heat fluxes associated with biomass burning is sufficient by itself to substantially reduce cloudiness.