Phase transitions of water importantly shape the weather in the Earth’s atmosphere. Naturally they are involved in the formation of clouds and precipitation, but also in the global energy budget via transport of latent heat in the form of water vapor from the equator to the poles. However, the release of latent heat also affects the atmospheric flow in the midlatitudes. This presentation will highlight how latent heat release modulates the large-scale extratropical circulation and thus weather variability in the midlatitudes. In addition the challenges imposed by latent heat release on numerical weather prediction will be discussed.