Most lidars used for cloud observations have the range resolution of about 10 m, so they are incapable of resolving submeter-scale processes that are crucial to cloud evolution. This article describes a prototype of a ground-based, vertically pointing, time-gated, time-correlated single-photon-counting lidar (referred to as the T2 lidar) developed to explore atmospheric clouds at range resolution two orders of magnitude finer than traditional atmospheric lidars. The T2 lidar emits green-light pulses (532 nm) at a repetition rate of 20.6 kHz and a pulse width of ∼650 ps, which enables the observation of aerosol and cloud layers at heights from a few hundred meters to 7.28 km above the ground level at range resolution down to 10 cm. In addition, a digital delay pulse generator controls the detector to only receive photons for a short period after each laser pulse. This time-gated technique blocks photons arriving from regions outside the target zone, thus significantly reducing the noise level and allowing observation even inside clouds. Initial observations show that the T2 lidar can detect sharp cloud boundaries and fine structures near the cloud base. Such refined measurements of cloud structure could lead to an improved understanding of microphysical processes such as droplet activation, entrainment and mixing, and precipitation.