Cloud iridescence is the occurrence of colors in a cloud similar to those seen in oil films on puddles, and is similar to irisation. It is a fairly uncommon phenomenon, most often observed in altocumulus, cirrocumulus and lenticular clouds, and very rarely in cirrus cloudsIridescent clouds are a diffraction phenomenon caused by small water droplets or small ice crystals individually scattering light. Larger ice crystals produce halos..