What is a rainbow cloud? A rainbow cloud can occur because of something called cloud iridescence. It usually happens in altocumulus, cirrocumulus, lenticular and cirrus clouds. Iridescent clouds happen because of diffraction – a phenomenon that occurs when small water droplets or small ice crystals scatter the sun's light. This can happen because of something called cloud iridescence. It usually happens in altocumulus, cirrocumulus, lenticular and cirrus clouds. Iridescent clouds happen because of diffraction – a phenomenon that occurs when small water droplets or small ice crystals scatter the sun's light. Cloud iridescence is relatively rare. The cloud must be thin and have lots of water droplets or ice crystals of about the same size. When that happens, the sun's rays encounter just a few droplets at a time. For this reason, semi-transparent clouds or clouds that are just forming are the ones most likely to have iridescence. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> And the sun has to be at just the right angle. I have seen a few of them over the years, usually at the edge of a thicker cloud, But they really are rare. I was sitting under the carport today enjoying the warm weather when I saw a bunch of them. There was a row of thin clouds passing by. As soon as the cloud rainbow disappeared from one cloud, another cloud came by and there was another cloud rainbow. The display must have lasted for 15 minutes or more. I feel so blessed. Image copied from the internet.