An improved dynamical downscaling method (IDD) with general circulation model (GCM) bias corrections is developed and assessed over North America. A set of regional climate simulations is performed with the Weather Research and Forecasting Model (WRF) version 3.3 embedded in the National Center for Atmospheric Research's (NCAR's) Community Atmosphere Model (CAM). The GCM climatological means and the amplitudes of interannual variations are adjusted based on the National Centers for Environmental Prediction (NCEP)-NCAR global reanalysis products (NNRP) before using them to drive WRF. In this study, the WRF downscaling experiments are identical except the initial and lateral boundary conditions derived from the NNRP, original GCM output, and bias-corrected GCM output, respectively. The analysis finds that the IDD greatly improves the downscaled climate in both climatological means and extreme events relative to the traditional dynamical downscaling approach (TDD). The errors of downscaled climatological mean air temperature, geopotential height, wind vector, moisture, and precipitation are greatly reduced when the GCM bias corrections are applied. In the meantime, IDD also improves the downscaled extreme events characterized by the reduced errors in 2-yr return levels of surface air temperature and precipitation. In comparison with TDD, IDD is also able to produce a more realistic probability distribution in summer daily maximum temperature over the central U.S.-Canada region as well as in summer and winter daily precipitation over the middle and eastern United States. © 2012 American Meteorological Society.