ECMWF's preparations for cloud and rain assimilation encompass development of linearized physics, improved satellite data utilization, a new humidity analysis, and another look at the "spindown" problem. uropean, American, and Japanese satellite agen-cies have a number of Earth-observation missions with the objective of providing improved mea-surements of components of the global hydrological cycle—clouds, precipitation, soil moisture, and water vapor—from a range of operational platforms in both polar and geostationary orbits. Significant develop-ment of data assimilation methods will be necessary to make full use of both the existing and new types of observations of the water cycle. The small-scale In final form 10 September 2004 ©2005 American Meteorological Society variability in atmospheric humidity and its strong dependence on physics and dynamics need to be represented accurately in the assimilation systems. In this paper we report on a comprehensive research program at the ECMWF (see appendix for definitions of all acronyms and abbreviations) devoted to cloud and rain assimilation and humidity analysis. The aim is to explore the information contained in radiances obtained from microwave and infrared sounders and imagers in clear, cloudy, and precipitating skies. Current radiance assimilation methods (McNally et al. 1999, 2000) leave important data gaps in areas of clouds and precipitation, as illustrated in Fig. 1 for the infra-red (Fig. 1a) and microwave (Figs. 1b,c). The assimila-tion is therefore relatively ineffective in correcting for forecast errors in cloudy and rainy regions. To extend direct radiance assimilation to all-sky conditions re-quires upgrades to the assimilation system itself, and that fast radiative transfer models be extended and enhanced to incorporate the effects of clouds and precipitation.