This investigation aims at understanding the interaction between atmospheric dynamics and cloud radiative forcing. The study involves: (a) Analyses of satellite observations of the radiation budget, water vapor and cloud images as well as conventional observations of SST, heights and moisture fields to obtain the regional distributions of seasonal and inter-annual variations in cloud radiative forcing and the H2O greenhouse effect, (b) Use of the NCAR CCM and 1-D radiative-convective models to investigate the effects of radiative heating on the model dynamics and thermodynamics. This investigation will make valuable contributions in our understanding of the role of clouds in modulating the earth's climate system.