The process where water vapor cools and forms clouds is called condensation. As warm air rises, it cools and loses capacity to hold moisture, leading to the transformation of water vapor into tiny liquid water droplets or ice crystals. This process is essential in the water cycle and is influenced by factors such as temperature and humidity. As more water vapor condenses, droplets coalesce and form clouds, which can later precipitate as rain or snow, playing a key role in weather patterns and ecosystem health.