This report summarizes the work accomplished during the first phase of an investigation concerning methods of introducing digitized satellite imagery into short-range, objective forecasting operations. The data archive being assembled for this study is described, with particular attention given to the steps taken to maximize the accuracy of the satellite imagery. These steps included 'fine tuning' the navigation and selecting procedures for 'normalizing' the data by correcting for the effects of Lambertian and anisotropic scattering. Consistency of the data, spatial and temporal, was tested by analysis of ground reflectance during cloudless days, and a pilot test of the specification of single layers of clouds was conducted. Both of these tests gave encouraging results. An investigation of specifying precipitation rate, using just the visible reflectance and infrared temperature of the cloud top, also produced good results. Nomograms for the average rate during the hour following the satellite observation, as well as for the probability of observing more than 0.01 in. and 0.10 in. of precipitation, are illustrated. Two appendices present the geometrical and optical equations relevant to the investigation. (Author).