Sky watchers often report seeing rainbow colors in clouds. There are many different kinds of rainbow features you might see associated with clouds, such as halos and colored arcs and even true rainbows. But – if the rainbow-like colors are randomly distributed, and if the sun is nearby in the sky – what you’re seeing is likely an iridescent cloud.

These sorts of clouds are caused by particularly tiny ice crystals or water droplets in the air. Larger ice crystals produce lunar or solar halos, but tiny ice crystals or water droplets cause light to be diffracted – spread out – creating this rainbow-like effect in the clouds.