A limited‐area model (LAM) is established based on a global model (Global–Regional Integrated Forecast System; GRIST). GRIST–LAM inherits all the technical features of its global counterpart, enabling independent regional weather and climate modeling. The key advancement involves extending the original dynamical core to integrate it under the lateral boundary conditions (LBCs). As an initial development and evaluation study, this paper focuses on the consistency issue between the LAM and the global model. Three perfect‐model tests, using global solutions as LBCs and background truths, were performed to evaluate the LAM behaviors. In the pure dynamical core test, the LBC errors do not compromise the solutions within the interior domain. However, certain configurations can lead to more discontinuous solutions at the domain boundary. The solution error for a specified region decreases as the domain size increases when all other factors are equal. A small error pulse is generated during the initial stage of integration due to the presence of artificial transient waves induced by the LBCs. The model generates fine‐scale details and smaller errors based on coarser‐resolution LBCs. The consistency between LAM and LBC also influences the errors. The climate simulations demonstrate that both hydrostatic and non‐hydrostatic LAMs can reach statistical equilibrium. Regional model climates in the interior domain have higher quality but are sensitive to domain size and LBC configuration. Using a variable LBC coefficient is helpful to alleviate the artificial precipitation at the boundary. In the kilometer‐scale test, the global variable‐resolution model and its LAM counterpart show comparable results. Their performance is competitive with that of a uniform‐resolution global storm‐resolving simulation. Global variable‐resolution and LAM generate higher magnitudes in the tail part of the kinetic energy spectra due to higher local resolution and produce a consistent time evolution of precipitation. The broad implication of this study is also discussed.