Our recently developed nonlinear spectral gravity wave (GW) parameterization has been implemented into a Martian general circulation model (GCM) that has been extended to ∼130 km height. The simulations reveal a very strong influence of subgrid‐scale GWs with non‐zero phase velocities in the upper mesosphere (100–130 km). The momentum deposition provided by breaking/saturating/dissipating GWs of lower atmospheric origin significantly decelerate the zonal wind, and even produce jet reversals similar to those observed in the terrestrial mesosphere and lower thermosphere. GWs also weaken the meridional wind, transform the two‐cell meridional equinoctial circulation to a one‐cell summer‐to‐winter hemisphere transport, and modify the zonal‐mean temperature by up to ±15 K. Especially large temperature changes occur over the winter pole, where GW‐altered meridional circulation enhances both “middle” and “upper” atmosphere maxima by up to 25 K. A series of sensitivity tests demonstrates that these results are not an artefact of a poorly constrained GW scheme, but must be considered as robust features of the Martian atmospheric dynamics.