Accurate knowledge of effects of cloud microphysics on satellite microwave sounding channel measurements is crucial for retrievals of temperature and moisture profiles in cloudy conditions. Such effects are usually unknown from observational analysis because of difficulties in obtaining cloud information such as vertical distributions of cloud hydrometers. This study will simulate and analyze the AMSU responses to various cloud parameters using a radiative transfer model and the cloud resolving model outputs (li et al. 1999). The 2-D cloud resolving model includes prognostic equations for cloud contents and cloud microphysics parameterization and radiation parameterization (Li et al. 2001). The model has been demonstrated to simulate tropical thermodynamic states and surface fluxes and rain rates well during the Tropical Ocean Global Atmosphere-Coupled Ocean Atmosphere Response Experiment (TOGA-COARE). A new fast and accurate microwave radiative transfer model (Liu and Weng 2001) including scattering and polarization is applied to compute the radiances at AMSU frequencies and bandwidths based on thermodynamic profiles and cloud information derived from the cloud resolving simulation. The study is initially focused on the effects of vertical profiles of cloud liquid water and cloud ice water on the brightness temperature at the top of atmosphere at various AMSU sounding frequencies. More results will be reported in the meeting.