A three-dimensional cloud analysis system, originally developed at the Forecast Systems Laboratory (FSL) as a part of the Local Analysis and Prediction System (LAPS), was modified and used by the ARPS Data Assimilation System (ADAS) at the University of Oklahoma (OU). This system uses a model forecast as a first guess, merges satellite data, radar data , and surface reports to produce three-dimensional cloud liquid water, ice particles, precipitation, and modified temperature, moisture, and wind fields. Through cooperation with the National Severe Storms Laboratory (NSSL) and OU, the cloud analysis system was transferred to the Naval Research Laboratory (NRL) at Monterey, California in 2000 and is running at NRL on a real-time basis . Further modifications have been made to the system to use the satellite data, surface observations, and the background forecast fields from the Navy's Coupled Ocean/Atmosphere Mesoscale Prediction System (COAMPS) directly from the Tactical Environmental Data Subsystem (TEDS). A verification system has also been developed at NRL to automatically determine the accuracy of the cloud products from the system for quality control. This system is a part of the NRL NOWCAST data fusion system. The three-dimensional cloud analysis from ADAS will also be used to initialize COAMPS cloud fields. Further investigation will be performed to study the impacts of improved initial cloud fields on model's cloud and precipitation forecasts.