To improve radiative transfer calculations for inhomogeneous clouds, a consistent means of modeling inhomogeneity is needed. One current method of modeling cloud inhomogeneity is through the use of fractal parameters. This method is based on the supposition that cloud inhomogeneity over a large range of scales is related. An analysis technique named wavelet analysis provides a means of studying the multiscale nature of cloud inhomogeneity. In this paper, the authors discuss the analysis and modeling of cloud inhomogeneity through the use of wavelet analysis. Wavelet analysis as well as other windowed analysis techniques are used to study liquid water path (LWP) measurements obtained during the marine stratocumulus phase of the First ISCCP (International Satellite Cloud Climatology Project) Regional Experiment. Statistics obtained using analysis windows, which are translated to span the LWP dataset, are used to study the local (small scale) properties of the cloud field as well as their time dependence. The LWP data are transformed onto an orthogonal wavelet basis that represents the data as a number of times series. Each of these time series lies within a frequency band and has a mean frequency that is half the frequency of the previous band. Wavelet analysis combined with translated analysis windows reveals that the local standard deviation of each frequency band is correlated with the local standard deviation of the other frequency bands. The ratio between the standard deviation of adjacent frequency bands is 0.9 and remains constant with respect to time. This ratio defined as the variance coupling parameter is applicable to all of the frequency bands studied and appears to be related to the slope of the data's power spectrum. Similar analyses are performed on two cloud inhomogeneity models, which use fractal-based concepts to introduce inhomogeneity into a uniform cloud field. The bounded cascade model does this by iteratively redistributing LWP at each scale using the value of the local mean. This model is reformulated into a wavelet multiresolution framework, thereby presenting a number of variants of the bounded cascade model. One variant introduced in this paper is the 'variance coupled model,' which redistributes LWP using the local standard deviation and the variance coupling parameter. While the bounded cascade model provides an elegant two- parameter model for generating cloud inhomogeneity, the multiresolution framework provides more flexibility at the expense of model complexity. Comparisons are made with the results from the LWP data analysis to demonstrate both the strengths and weaknesses of these models