Modern cloud physics research commenced in the 1940s with the practical goal of weather modification. Over the last 35 years our understanding of the microphysical properties of clouds has increased significantly but weather modification has not become widely established as an economically worthwhile technique for the enhancement of natural rainfall. Cloud physics research is now focused on the links between clouds and the larger-scale behaviour of the atmosphere. The main effects of clouds on weather and climate are through the initiation of precipitation, the modulation of radiative transfer and the vertical transport of air masses. The relationships between these processes and the small-scale properties of clouds are discussed in this review.