Many processes and feedback mechanisms are involved in land-atmosphere interactions that play an important role in determining the boundary layer structure throughout the diurnal cycle. Here, the effect of soil moisture on the development of shallow cumulus convection is investigated using a coupled large-eddy simulation (LES)–land surface model (LSM) framework. First, the coupled model is run for an idealised case based on measurements at the ARM Southern Great Plain site on 21 June 1997 to demonstrate that many characteristics of the subcloud layer turbulence and of the cumulus layer can be modelled successfully. Moreover, an extensive sensitivity study is performed with different amounts of soil moisture and varying atmospheric conditions. Our results support the hypothesis that the response of shallow cumulus clouds due to a change of soil moisture severely depends on the thermal stability conditions. Furthermore, they also point out that the atmospheric moisture content is as important as the static stability in determining the boundary layer characteristics and in particular the fractional cloud cover. The results demonstrate that the soil moisture-cloud cover coupling is positive in most of the cases. However, we show that under specific conditions (a less stably stratified moist atmosphere) convective activity and cloud formation is stronger over dry soils, where the principle driving mechanism for cloud development is the boundary layer growth that tends to increase relative humidity by adiabatic cooling of the air at the top of the boundary layer. This leads to a soil moisture cloud cover relationship in which the cloud cover fraction decreases with an increase of soil moisture. Moreover, our findings suggest that in the limiting case of a water saturated soil the mean cloud cover is independent of static stability, but only depends on the vertical integrated atmospheric moisture content.