Cloud height and cloud coverage detection are important for total ozone retrieval using ultraviolet and visible scattered light. Use of the O2 A and B bands, around 761 and 687 nm, by a satellite-borne instrumens of moderately high spectral resolution viewing in the nadir makes it possible to detect cloud top height and related parameters, including fractional coverage. The measured values of a satellite-borne spectrometer are convolutions of the instrument slit function and the atmospheric transmittance between cloud top and satellite. Studies here determine the optical depth between a satellite orbit and the Earth or cloud top height to high accuracy using FASCODE 3. Cloud top height and a cloud coverage parameter are determined by the least squares fitting to calculated radiance ratios in the oxygen bands. A grid search method is used to search the parameter space of cloud top height and the coverage parameter to minimize an appropriate sum of squares of deviations. For this search, nonlinearity of the atmospheric transmittance (i.e., leverage based on varying amounts of saturation in the absorption spectrum) is important for distinguishing between cloud top height and fractional coverage. Using the above-mentioned method, an operational cloud detection algorithm which uses minimal computation time can be implemented. ¿ American Geophysical Union 1994