The evaluation and model element description of the second version of the unstructured-mesh Finite-volumE Sea ice-Ocean Model (FESOM2.0) are presented. The new version of the model takes advantage of the finite-volume approach, whereas its predecessor version, FESOM1.4 was based on the finite-element approach. The model sensitivity to arbitrary Lagrangian–Eulerian (ALE) linear and nonlinear free-surface formulation, Gent–McWilliams eddy parameterization, isoneutral Redi diffusion and different vertical mixing schemes is documented. The hydrographic biases, large-scale circulation, numerical performance and scalability of FESOM2.0 are compared with its predecessor, FESOM1.4. FESOM2.0 shows biases with a magnitude comparable to FESOM1.4 and simulates a more realistic Atlantic meridional overturning circulation (AMOC). Compared to its predecessor, FESOM2.0 provides clearly defined fluxes and a 3 times higher throughput in terms of simulated years per day (SYPD). It is thus the first mature global unstructured-mesh ocean model with computational efficiency comparable to state-of-the-art structured-mesh ocean models. Other key elements of the model and new development will be described in follow-up papers.