Abstract. In this paper a new algorithm for the determination of the vertical distribution of the droplet effective radius in shallow warm clouds is proposed. The method is based on the fact that the spectral top-of-atmosphere reflectance in the near IR spectral range depends on the vertical profile of the effective radius of droplets. The retrieval is based on the optimal estimation method and direct radiative transfer calculations of respective weighting functions. The applications of the method both to synthetic and satellite data are presented. An important feature of the method is the fact that the cloud optical thickness and cloud effective radius are found using the standard homogeneous cloud retrieval and then the retrievals are improved assuming the type of the droplet effective radius profile.