A revised version of the CloudSat–MODIS cloud liquid water retrieval algorithm is presented. The new algorithm, which combines measurements of radar reflectivity and cloud optical depth, addresses issues discovered in the current CloudSat–MODIS cloud water content (CWC) product. This current product is shown to be underconstrained by observations and to be too dependent on prior information incorporated into the Bayesian optimal-estimation algorithm. The most significant change made to the algorithm in this study was decreasing the number of independent variables to allow the observations to constrain the retrieved values better. The retrieval was also reformulated for improved compliance with the mathematical assumptions of the optimal-estimation algorithm. To validate the accuracy of the revised algorithm, the path-integrated attenuation (PIA) of the CloudSat radar signal was computed from the algorithm results. These modeled values were compared with independent measurements of the PIA that were obtained using a surface reference technique. This comparison shows that the cloud liquid water retrieved by the algorithm is close to being unbiased. The revised algorithm was also found to be an improvement over the current CloudSat CWC product and, to a lesser degree, the MODIS-derived cloud liquid water path.