We present the first examination on how 3-D radiative transfer impacts satellite cloud detection that uses a single visible channel threshold. The 3-D radiative transfer through predefined heterogeneous cloud fields embedded in a range of horizontally homogeneous aerosol fields have been carried out to generate synthetic nadir-viewing satellite images at a wavelength of 0.67 mm. The finest spatial resolution of the cloud field is 30 m. We show that 3-D radiative effects cause significant histogram overlap between the radiance distribution of clear and cloudy pixels, the degree to which depends on many factors (resolution, solar zenith angle, surface reflectance, aerosol optical depth (AOD), cloud top variability, etc.). This overlap precludes the existence of a threshold that can correctly separate all clear pixels from cloudy pixels. The region of clear/cloud radiance overlap includes moderately large (up to 5 in our simulations) cloud optical depths. Purpose-driven cloud masks, defined by different thresholds, are applied to the simulated images to examine their impact on retrieving cloud fraction and AOD. Large (up to 100s of %) systematic errors were observed that depended on the type of cloud mask and the factors that influence the clear/cloud radiance overlap, with a strong dependence on solar zenith angle. Different strategies in computing domain-averaged AOD were performed showing that the domain-averaged BRF from all clear pixels produced the smallest AOD biases with the weakest (but still large) dependence on solar zenith angle. The large dependence of the bias on solar zenith angle has serious implications for climate research that uses satellite cloud and aerosol products.