A model for the vertical variation of microphysical and optical properties of single-layer water clouds is used to design a procedure to obtain cloud droplet concentration from satellite cloud optical thickness/effective radius retrievals. The model allows for smooth vertical variations in microphysical variables including droplet concentration and liquid water content. The procedure is applied to data from the MODIS instrument aboard the EOS-TERRA satellite platform over a region near Cape Grim, Tasmania, over the Southern Ocean. At this unpolluted location, there are seasonally repeated well-described variations in cloud condensation nucleus concentration. The satellite observations show that there is a factor 2.5 difference in retrieved droplet concentration between the summer and winter seasons as measured over the 4 year period (July 2000 to July 2004). Comparison of these results with cloud condensation nuclei concentrations observed at Cape Grim showed good agreement. Furthermore, for a fixed solar zenith angle cos (45¿) cloud albedo varied between 0.45 and 0.55 and exhibited a clear correlation with the retrieved droplet concentration (correlation coefficient R = 0.80). Such correlation was absent between albedo and the second retrieval product, namely the cloud depth.