Abstract. We introduce a new spectral method for the retrieval of optical thickness and effective radius from cloud transmittance that relies on the spectral slope of the normalized transmittance between 1565 nm and 1634 nm, and on cloud transmittance at a visible wavelength. The standard dual-wavelength technique, which is traditionally used in reflectance-based retrievals, is ill-suited for transmittance because it lacks sensitivity to effective radius, especially for optically thin clouds. Using the spectral slope rather than the transmittance itself enhances the sensitivity of transmittance observations with respect to the effective radius. This is demonstrated by applying it to the moderate spectral resolution observations from the Solar Spectral Flux Radiometer (SSFR) and Shortwave Spectroradiometer (SWS), and by examining the retrieval uncertainties of the standard and the spectral method for data from the DOE ARM Southern Great Plains (SGP) site and a NOAA ship cruise (ICEALOT). The liquid water path (LWP) is derived from the retrieved optical thickness and effective radius, based on two different assumptions about the cloud vertical profile, and compared to the simultaneous observations from a microwave radiometer. Optical thickness and effective radius is also compared to MODIS retrievals. In general, the effective radius uncertainties were much larger for the standard retrieval than for the spectral retrieval, particularly for thin clouds. When defining 2 μm as upper limit for the tolerable uncertainty of the effective radius, the standard method returned only very few valid retrievals for clouds with an optical thickness below 25. For the analyzed ICEALOT data (mean optical thickness 23), the spectral method provided valid retrievals for 84 % of the data (24 % for the standard method). For the SGP data (mean optical thickness 44), both methods provided a high return of 90 % for the spectral method and 78 % for the standard method.