A nonlinear spectral gravity wave (GW) drag parameterization systematically accounting for breaking and dissipation in the thermosphere developed by Yiğit et al. (2008) has been implemented into the University College London Coupled Middle Atmosphere‐Thermosphere‐2 (CMAT2) general circulation model (GCM). The dynamical role of GWs propagating upward from the lower atmosphere has been studied in a series of GCM tests for June solstice conditions. The results suggest that GW drag is not only nonnegligible above the turbopause, but that GWs propagate strongly into the upper thermosphere, and, upon their dissipation, deposit momentum comparable to that of ion drag, at least up to 180–200 km. The effects of thermospheric GW drag are particularly noticeable in the winter (southern) hemisphere, where weaker westerlies and stronger high‐latitude easterlies are simulated well, in agreement with the empirical Horizontal Wind Model (HWM93). The dynamic response in the F region is sensitive to the variations of the source spectrum. However, the spectra commonly employed in middle atmosphere GCMs reproduce the circulation both in the lower and upper thermosphere reasonably well.