Recent observational and theoretical studies of the global properties of small‐scale atmospheric gravity waves have highlighted the global effects of these waves on the circulation from the surface to the middle atmosphere. The effects of gravity waves on the large‐scale circulation have long been treated via parametrizations in both climate and weather‐forecasting applications. In these parametrizations, key parameters describe the global distributions of gravity‐wave momentum flux, wavelengths and frequencies. Until recently, global observations could not define the required parameters because the waves are small in scale and intermittent in occurrence. Recent satellite and other global datasets with improved resolution, along with innovative analysis methods, are now providing constraints for the parametrizations that can improve the treatment of these waves in climate‐prediction models. Research using very‐high‐resolution global models has also recently demonstrated the capability to resolve gravity waves and their circulation effects, and when tested against observations these models show some very realistic properties. Here we review recent studies on gravity‐wave effects in stratosphere‐resolving climate models, recent observations and analysis methods that reveal global patterns in gravity‐wave momentum fluxes and results of very‐high‐resolution model studies, and we outline some future research requirements to improve the treatment of these waves in climate simulations. Copyright © 2010 Royal Meteorological Society and Crown in the right of Canada