Cloud cover and height are derived from NOAA-12 and NOAA-14 advanced very high resolution radiometer (AVHRR) data taken over the Arctic Ocean for an 8¿ latitude by 30¿ longitude domain centered on the Surface Heat Budget of the Arctic Ocean (SHEBA) ship Des Groseilliers. Multispectral thresholds were determined subjectively and applied to each image, providing excellent temporal coverage during the May--July 1998 First ISCCP Regional Experiment Arctic Clouds Experiment (FIRE ACE). Mean cloud amounts were near 70% for the entire period but varied regionally from 55 to 85%. On the basis of a limited climatology of ship observations, these values appear to be typical for this part of the Arctic, suggesting that most of FIRE ACE was conducted in representative cloud conditions. A diurnal cycle of mean cloud amount was found for the domain during June and July having a range of 10% with a middle-to-late morning maximum. The AVHRR-derived cloud amounts are in good agreement with visual and radar measurements taken from the Des Groseilliers, except for a few subvisual and low cloud cases. Average AVHRR-derived cloudiness differ from the mean values obtained at the surface by -1 to +3%; this represents a significant improvement over previous satellite retrievals. The satellite-derived cloud heights are very accurate for most of the low cloud cases. Higher cloud altitudes are less certain because cloud optical depths were not available to adjust the temperature observed for the optically thin high clouds, and the radiating temperature of many of the high clouds is representative of some altitude deep in the cloud rather than the highest altitude level of condensate. The development of a more accurate automated algorithm for detecting polar clouds at AVHRR wavelengths will require inclusion of variable thresholds to account for the angular dependence of the surface reflectance as well as the seasonally changing albedos of the ice pack. The use of a 1.6-μm channel on the AVHRR, or other complement of instruments, will greatly enhance the capabilities for detecting clouds over poles during summer. ¿ 2001 American Geophysical Union