Abstract Dual-polarization radar observations of precipitation depend on size–shape relations of raindrops. There are several studies presented in literature dedicated to the investigation of this relation. In this work a new approach of investigating raindrop size–shape relation on short time and spatial scales from radar observations is presented. The presented method is based on the use of dual-polarization Doppler power spectral analysis. By measuring complete Doppler spectra at a sufficiently high elevation angle at two polarization settings, namely, horizontal and vertical, it is possible to retrieve drop size distribution (DSD) parameters, ambient air velocity, spectral broadening, and the slope of the assumed linear dependence of raindrop size–shape relation. This paper is mainly focused on the development of the retrieval algorithm and analysis of its performance. As a part of the proposed method an efficient algorithm for DSD parameter retrieval was developed. It is shown that the DSD parameter retrieval method, which usually requires the solution of five-parameter nonlinear optimization problems, can be simplified to a three-parameter nonlinear least squares problem. Furthermore, the performance of the proposed retrieval technique is illustrated on the dual-polarization measurements collected by the S-band Transportable Atmospheric Radar (TARA) at Cabauw, Netherlands, and by the Colorado State University–University of Chicago–Illinois State Water Survey (CSU–CHILL) radar from Greeley, Colorado.