New particle formation (NPF) from nucleation and subsequent nuclei growth are frequently observed in the troposphere, difficult to simulate, and of importance to aerosol-cloud interactions. In this work, regional simulations with the fully coupled NPF-explicit WRF-Chem model link NPF to cloud properties, and to changes in both meteorology and air quality in the Midwestern US for summer 2008. Simulations including NPF have higher concentrations of condensation nuclei as anticipated from the particle production associated with nucleation, leading to cloud condensation nuclei (CCN) concentration enhancement at high supersaturations. However, the online-coupled model develops a number of unexpected features that can be traced to a feedback loop involving aqueous (in-cloud) oxidation of sulfur combined with boundary layer NPF. Simulations with NPF (relative to simulations without) exhibit reduced PM2.5 sulfate mass, cloud dimming (reductions in cloud frequency, CCN concentration at low supersaturation, cloud optical depth, and cloud droplet number concentration), and enhanced shortwave radiation reaching the surface. This effect of NPF on PM2.5 mass is mostly absent for other constituents of PM2.5. Implications of this feedback loop, which is not considered in most climate and air quality modeling, are discussed.