This study investigates the variability of clouds, primarily marine stratus clouds, and how they are associated with surface temperature anomalies over California, especially along the coastal margin. We focus on the summer months of June to September when marine stratus are the dominant cloud type. Data used include satellite cloud reflectivity (cloud albedo) measurements, hourly surface observations of cloud cover and air temperature at coastal airports, and observed values of daily surface temperature at stations throughout California and Nevada. Much of the anomalous variability of summer clouds is organized over regional patterns that affect considerable portions of the coast, often extend hundreds of kilometers to the west and southwest over the North Pacific, and are bounded to the east by coastal mountains. The occurrence of marine stratus is positively correlated with both the strength and height of the thermal inversion that caps the marine boundary layer, with inversion base height being a key factor in determining their inland penetration. Cloud cover is strongly associated with surface temperature variations. In general, increased presence of cloud (higher cloud albedo) produces cooler daytime temperatures and warmer nighttime temperatures. Summer daytime temperature fluctuations associated with cloud cover variations typically exceed 1°C. The inversion-cloud albedo-temperature associations that occur at daily timescales are also found at seasonal timescales.