Using two versions of the GFDL coupled ocean‐atmosphere model, one where water vapor anomalies are allowed to affect the longwave radiation calculation and one where they are not, we examine the role of water vapor feedback in internal precipitation variability and greenhouse‐gas‐forced intensification of the hydrologic cycle. Without external forcing, the experiment with water vapor feedback produces 44% more annual‐mean, global‐mean precipitation variability than the one without. We diagnose the reason for this difference: In both experiments, global‐mean surface temperature anomalies are associated with water vapor anomalies. However, when water vapor interacts with longwave radiation, the temperature anomalies are associated with larger anomalies in surface downward longwave radiation. This increases the temperature anomaly damping through latent heat flux, creating an evaporation anomaly. The evaporation anomaly, in turn, leads to an anomaly of nearly the same magnitude in precipitation. In the experiment without water vapor feedback, this mechanism is absent. While the interaction between longwave and water vapor has a large impact on the global hydrologic cycle internal variations, its effect decreases as spatial scales decrease, so water vapor feedback has only a very small impact on grid‐scale hydrologic variability. Water vapor feedback also affects the hydrologic cycle intensification when greenhouse gas concentrations increase. By the 5th century of global warming experiments where CO2 is increased and then fixed at its doubled value, the global‐mean precipitation increase is nearly an order of magnitude larger when water vapor feedback is present. The cause of this difference is similar to the cause of the difference in internal precipitation variability: When water vapor feedback is present, the increase in water vapor associated with a warmer climate enhances downward longwave radiation. To maintain surface heat balance, evaporation increases, leading to a similar increase in precipitation. This effect is absent in the experiment without water vapor feedback. The large impact of water vapor feedback on hydrologic cycle intensification does not weaken as spatial scales decrease, unlike the internal variability case. Accurate representations of water vapor feedback are therefore necessary to simulate global‐scale hydrologic variability and intensification of the hydrologic cycle in global warming.