A high spectral resolution lidar (HSRL) system based on injection-seeded Nd:YAG laser and iodine absorption filter has been developed for the quantitative measurement of aerosol and cloud. The laser frequency is stabilized at 80 MHz by a frequency locking system and the absorption line of iodine cell is selected at the 1111 line with 2 GHz width. The observations show that the HSRL can provide vertical profiles of particle extinction coefficient, backscattering coefficient and lidar ratio for cloud and aerosol up to 12 km altitude, simultaneously. For the measured cases, the lidar ratios are 10~20 sr for cloud, 28~37 sr for dust, and 58~70 sr for urban pollution aerosol. It reveals the potential of HSRL to distinguish the type of aerosol and cloud. Time series measurements are given and demonstrate that the HSRL has ability to continuously observe the aerosol and cloud for day and night.