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In this tutorial I'm going to show a very nice and easy way for creating realistic clouds using Photoshop. However, the end result for you may not be exactly the same as mine. I'll try to be detailed and provide you with all the information that will help you create a very realistic cloud!
So, let’s begin.
Step 1
The first thing we need to do is create our cloud brush. Go to File, New and create a new 600x600 document. And make the foreground color black and the background color white.

Step 2
Now go to Filter, then Render and select Clouds. It will change your background to a white and gray cloud.

Step 3
Using the Lasso Tool, select a part from the cloud. Make sure that you select a part with dark and light gray.

Step 4
With that part selected go to Select, then Modify, choose Feather and set the radius to about 10 to make the edge of the shape softer.

Step 5
Now press Ctrl + C to copy the selection and the Ctrl + V to paste it a new layer. Now make the background layer invisible by clicking the eye icon beside it.

Step 6
Select the layer with the cloud we just pasted and go to Image and select Trim and Click OK. Trim removes all the areas that are 100% transparent and contains no pixels.

Step 7
Go to Image, Adjustments and select Brightness/Contrast to edit the brush.

Step 8
Now we have to save the brush. Go to Edit and select Define Brush Preset. Name your brush and click OK.

Step 9
Now select the Brush Tool and click F5 to show the Brush Palette. Select your brush. If you hover over a brush, the name of it will appear. Leave these settings the way they are.

Step 10
Go to Shape Dynamics and apply the settings shown below.

Step 11
Go to Color Dynamics and apply the settings shown below too.

Step 12
Make sure that all the other options are unchecked. We only changed the Shape and Color Dynamics.
Go to Brush Preset, select your brush and choose Create new brush in the bottom. Give it a name and click OK. Then go to the previous brush you created, right click on it and then choose Delete.

Step 13
Now let's save the brush for further use. Click F5 to hide the Brush Palette. Go to Edit and choose Preset Manager. Select your brush and click on Save Set. Give it a name and then click OK. Click Done when you're finished.

Now we're done with creating the brush. Next thing is, USE IT!
Step 14
Create a new document 640x480. If you want larger or smaller, you're free to do so.
Set the Foreground to a dark blue and set the background to a lighter blue. The values I chose are as follows:
Foreground: #25477d
Background: #72a1c7
Step 15
Now select the gradient tool and select the Foreground to Background Option and make it linear.

Step 16
Now, place your mouse at the top of the page and drag it all the way down to create a gradient color in the background. Press Shift as you drag to make the line straight.

Step 17
Now press D to reset the foreground and background to black and white. Then Click X to switch the colors, making the foreground white and the background white.

Step 18
Now create a new layer and select the Brush Tool and choose the clouds brush that we created. Now adjust the brush settings as below.

Now let's start drawing!
Step 19
Now add another new layer, make the brush size smaller about 50px and start painting a small part inside the other cloud.

Step 20
I just made the background black for a second to show where I painted.

Step 21
Now, add another layer and decrease the size of the brush again to about 32 and start painting around the edge of the cloud from the top as shown below.

Step 22
Now, we'll merge the cloud layer. Make the background layer invisible and then create a new layer. Make sure that the new layer is selected and press Ctrl + Alt + Shift + E to merge the visible layers into the layer that we created. Rename it to clouds. Now make all the other layers invisible and bring back the background.

Step 23
Create a new layer, go to Edit and choose Fill. Make it 50% gray.

Step 24
Now press Ctrl + Alt + G to clip this layer to the Clouds layer and set the Mode to Overlay.

Step 25
Now select the burn Tool and in the options select the size of 60 px and no hardness. This will increase the contrast.

Step 26
With layer 4 selected, paint over the edge of the cloud.

Step 27
Now we have to add some shadow to the cloud to make it look even more realistic.
Set the foreground color to a dark blue. Color value: #25477d
Now click on the Create New Fill or Adjustment Layer (At the bottom of the Layer Palette) and choose Gradient. Set it to the values as below. Make sure that you select the “Foreground to Transparent” option from the menu.

Step 28
Now you should clip this layer with the layer below it pressing Ctrl + Alt + G.

Step 29
Your cloud should look something like this.

Step 30
Now click once on the masked part of the layer and click D to set the Foreground to black.

Step 31
Select the brush tool and adjust the settings as shown below.

Step 32
Now paint at the edges from the top and left side of the cloud where it needs to be brighter. If you need more or less opacity change it from the menu shown above considering that higher opacity places will be brighter. Use the blur tool to ease the transition between the darker and lighter parts. You should have something like shown below.

Step 33
Create a new layer and then click on the Create New Fill or Adjustment Layer (At the bottom of the Layer Palette) as we did before and choose Solid. Select dark/blue color. I selected #5d6f8f. Set the mode of this layer to color and clip it to the layers below it by pressing on Ctrl + Alt + G.

Step 34
You should have something like this now.

Step 35
Now we're going to create a new layer to merge all the other layers to create many clouds. These are the layers that should be visible.

Step 36
After you create a new layer, set the background to invisible. And while standing on the new layer click Ctrl + Alt + Shift + E to merge visible layers. After they’re merged bring the background back.

Step 37
Now let's make several copies of the cloud by dragging it to the "Create New Layer" icon. The Select the Move Tool and move the clouds around and spread them in the picture.

Step 38
Now select the brush tool, select our cloud brush and set it to 5px or a very small size. Make sure the opacity is 100%. Select the background layer and then create a new layer. Set the foreground color to a very light blue and the background to a bit darker one.
The values I used:
Foreground: #c0d3f5
Background: #91a7ce
Now start making random lines in the picture as shown below.

Step 39
Now go to Filter, choose Blur and select Motion Blur.

Step 40
Adjust it till you start seeing getting a realistic motion effect. I used the values below.

Result
There you go, add some birds or planes and you've got yourself a realistic image of the sky! The plane image is a photo. I just decreased the opacity of the cloud in the back to appear as if it's in the back.

Reza
I think it can be better
sivarangareddy
Dr A
Function keys? Hmmm ... I'll check the mac guide to see what the h those fossils do.
BUT -- it does get you into the philosophy of the thing.
Can't help but think there's a better way.

Processing, please wait ...
























Pliggs