The ASOS uses a laser beam ceilometer with a vertical measuring range of 12,600 feet and reporting range of 12,000 feet. The ASOS cloud sensor, or CHI, is a vertically pointed laser transmitter and receiver. Its operation is similar to radar in that the time interval between pulse transmission and reflected reception from a cloud base is used to determine the cloud height. Sophisticated time-averaging algorithms in the ACU are also used to interpret "cloud hit" information from the CHI and determine cloud height and amount.

The CHI reports will contain only opaque clouds. Moisture layers, or thin clouds detected by the CHI and considered too thin to be a cloud, will be reported as a restriction to vertical visibility or simply not reported. The reporting of vertical visibility is dependent on the thickness and density of the moisture layer. To correctly classify these signals received by the ceilometer, sensor software processes the data into three categories: "no hit," "cloud hit," and "unknown hit."