AbstractClouds in the presence of absorbing aerosols result in their apparent darkening, observed at the top of atmosphere (TOA), which is associated with the radiative effects of aerosol absorption. Owing to the large radiative effect and potential impacts on regional climate, above‐cloud aerosols have recently been characterized in multiple satellite‐based studies. While satellite data are particularly useful in showing the radiative impact of above‐cloud aerosols at the TOA, recent literature indicates large uncertainties in satellite retrievals of above‐cloud aerosol optical depth (AOD) and single scattering albedo (SSA), which are among the most important parameters in the assessment of associated radiative effects. In this study, we analyze radiative characteristics of clouds in the presence of wildfire smoke using airborne data primarily from NASA's Cloud Absorption Radiometer, collected during the Arctic Research of the Composition of the Troposphere from Aircraft and Satellites campaign in Canada during the 2008 summer season. We found a strong positive reflectance (R) gradient in the UV‐visible (VIS)‐near infrared (NIR) spectrum for clouds embedded in dense smoke, as opposed to an (expected) negative gradient for cloud‐free smoke and a flat spectrum for smoke‐free cloud cover. Several cases of clouds embedded in thick smoke were found, when the aircraft made circular/spiral measurements, which not only allowed the complete characterization of angular distribution of smoke scattering but also provided the vertical distribution of smoke and clouds (within 0.5–5 km). Specifically, the largest darkening by smoke was found in the UV/VIS, with R0.34μm reducing to 0.2 (or 20%), in contrast to 0.8 at NIR wavelengths (e.g., 1.27 µm). The observed darkening is associated with large AODs (0.5–3.0) and moderately low SSA (0.85–0.93 at 0.53 µm), resulting in a significantly large instantaneous aerosol forcing efficiency of 254 ± 47 W m−2 τ−1. Our observations of smoke‐cloud radiative interactions were found to be physically consistent with theoretical plane‐parallel 1‐D and Monte Carlo 3‐D radiative transfer calculations, capturing the observed gradient across UV‐VIS‐NIR. Results from this study offer insights into aerosol‐cloud radiative interactions and may help in better constraining satellite retrieval algorithms.