Clouds form in the atmosphere through a process called condensation. When water vapor in the air cools and condenses into tiny water droplets or ice crystals, clouds begin to form. This often happens when warm, moist air rises, expands, and cools at higher altitudes. As the air cools, it reaches its dew point, which is the temperature at which the air becomes saturated and water vapor begins to condense, leading to the formation of visible cloud formations in the sky.