The effect of cloud droplet sedimentation on the entrainment rate and liquid water path of a nocturnal nondrizzling stratocumulus layer is examined using large-eddy simulations (LES) with bulk microphysics. In agreement with a prior study by Ackerman et al. (2004), sedimentation is found to decrease entrainment rate and thereby increase liquid water path. They suggested this is due to reduction of boundary-layer turbulence. Our simulations suggest otherwise. Instead, sedimentation reduces entrainment by removing liquid water from the entrainment zone. This inhibits two mechanisms that promote the sinking of entrained air into the cloud layer–entrainment-induced evaporative cooling and longwave radiative cooling. A sensitivity study shows that the radiative effect is less important than the reduced evaporation. A possible parameterization of the effect of sedimentation on entrainment rate in a mixed layer model is proposed and tested. Since the droplet sedimentation rate is inversely related to cloud droplet (and presumably aerosol) concentration and nearly nondrizzling marine stratocumulus are widespread, sedimentation impacts on stratocumulus entrainment efficiency should be considered in climate model simulations of the aerosol indirect effect.