The development of the polarization lidar field over the past two decades is reviewed, and the current cloud-research capabilities and limitations are evaluated. Relying on fundamental scattering principles governing the interaction of polarized laser light with distinctly shaped hydrometers, this remote-sensing technique has contributed to our knowledge of the composition and structure of a variety of cloud types. For example, polarization lidar is a key component of current climate-research programs to characterize the properties of cirrus clouds, and is an integral part of multiple remote-sensor studies of mixed-phase cloud systems, such as winter mountain storms. Although unambiguous cloud-phase discrimination and the identification of some ice particle types and orientations are demonstrated capabilities, recent theoretical approaches involving ice crystal ray-tracing and cloud microphysical model simulations are promising to increase the utility of the technique. New results simulating the single and multiple scattering properties of precipitating mixed-phase clouds are given for illustration of such methods.