The last decade has seen tremendous growth in cloud dynamical and microphysical models that are able to simulate storms and storm systems with very high spatial resolution, typically of the order of a few kilometers. The fairly realistic distributions of cloud and hydrometeor properties that these models generate has, in turn, led to a renewed interest in the three-dimensional microwave radiative transfer modeling needed to understand the effect of cloud and rainfall inhomogeneities upon microwave observations. Monte Carlo methods and particularly backward Monte Carlo methods have shown themselves to be very desirable because of the quick convergence of the solutions. Unfortunately, backward Monte Carlo methods are not well suited to treat polarized radiation. This study reviews existing Monte Carlo methods and presents a new polarized Monte Carlo radiative transfer code. The code is based on a forward scheme but uses biasing techniques to keep the computational requirements equivalent to the backward solution. Radiative transfer computations have been performed using a microphysical-dynamical cloud model, and the results are presented together with the algorithm description. ¿ 1999 American Geophysical Union