The impact of aerosols and clouds on CO2 uptake and water use efficiency at Harvard Forest has been studied by using collocated turbulent flux and radiation measurements. Measurements of a multifilter narrowband radiometer provide both direct and diffuse components of photosynthetically active radiation (PAR) by product integrals of synthesized spectra, with a normalized action spectrum for canopy photosynthesis. Optical properties of aerosols and clouds are also retrieved from the radiometer data. Optical properties of aerosols and clouds have significant impacts on photosynthesis not only through changes of the total amount of PAR but also through changes of its spectral distribution (or light quality) and its partitioning between direct and diffuse components. The diffuse PAR is much greater under patchy/thin cloud conditions than under aerosol conditions for a given optical depth. The “diffuse radiation use efficiency” coefficients are 3.40 and 1.95 for patchy/thin clouds and aerosols, respectively. Furthermore, the radiation use efficiency of CO2 uptake under clouds which completely block direct beam solar (optically thick clouds) is approximately 57 and 13% higher than under aerosol and patchy/thin clouds, respectively. The water use efficiency also showed significant enhancement as atmospheric conditions changed from aerosols, to patchy/thin clouds, and then to clouds opaque to direct solar radiation. Under optically thick cloud conditions the water use efficiency is almost 5 and 3 times greater than under aerosol and patchy/thin cloud conditions, respectively. These indicate that an increase of diffuse radiation may not be the only factor responsible for the enhancement of carbon assimilation under cloudy conditions. Changes in many other factors, such as temperature, moisture, latent heating, and precipitation, in the presence of clouds may have both direct and indirect influences on carbon assimilation.