Abstract. Simulations of total and polarized cloud reflectance angular signatures such as the ones measured by the multi-angular and polarized radiometer POLDER3/PARASOL are used to evaluate cloud heterogeneity effects on cloud parameter retrievals. Effects on optical thickness, albedo, effective radius and variance of the cloud droplet size distribution and aerosol parameters above cloud are analyzed. Three different clouds that have the same mean optical thicknesses were generated: the first with a flat top, the second with a bumpy top and the last with a fractional cloud cover. At small scale (50m), for oblique solar incidence, the illumination effects lead to higher total but also polarized reflectances. The polarized reflectances even reach values that cannot be predicted by the 1-D homogeneous cloud assumption. At the POLDER scale (7km × 7km), the angular signature is modified by a combination of the plane–parallel bias and the shadowing and illumination effects. In order to quantify effects of cloud heterogeneity on operational products, we ran the POLDER operational algorithms on the simulated reflectances to retrieve the cloud optical thickness and albedo. Results show that the cloud optical thickness is greatly affected: biases can reach up to −70, −50 or +40% for backward, nadir and forward viewing directions, respectively. Concerning the albedo of the cloudy scenes, the errors are smaller, between −4.7% for solar incidence angle of 20° and up to about +8% for solar incidence angle of 60°. We also tested the heterogeneity effects on new algorithms that allow retrieving cloud droplet size distribution and cloud top pressures and also aerosol above clouds. Contrary to the bi-spectral method, the retrieved cloud droplet size parameters are not significantly affected by the cloud heterogeneity, which proves to be a great advantage of using polarized measurements. However, the cloud top pressure obtained from molecular scattering in the forward direction can be biased up to about 60hPa (around 550m). Concerning the aerosol optical thickness (AOT) above cloud, the results are different depending on the available angular information. Above the fractional cloud, when only side scattering angles between 100 and 130° are available, the AOT is underestimated because of the plane–parallel bias. However, for solar zenith angle of 60° it is overestimated because the polarized reflectances are increased in forward directions.