Continuous vertical gradient observations of aerosols, clouds and precipitation in mountainous terrain provide critical insights into their distribution characteristics in vertical direction. Mountain cloud observation is thus an effective way for studying the formation mechanism of cloud and precipitation. This article reviews the development and current status of mountain clouds and fog observation technology over the past century, and summarizes the domestic and international research results of mountain clouds and fog observation. Cloud droplet sampling technology has evolved through three main stages: collision sampling, laser scattering, and cloud particle imaging. Currently, laser scattering technology is the primary method for cloud particle measurement due to its reliability, meanwhile cloud particle holographic imaging technology has advanced significantly owing to its capacity to preserve particles’ natural morphology and ambient conditions. Europe pioneered in meteorological observations in mountainous regions. In China, the mountain clouds and fog observation began in the 1950s, promoting the physical study of clouds and precipitation. Over the decades, mountain cloud physical observation stations in China have covered several typical climate zones. The physical characteristics of aerosols, cloud condensation nucleus, atmospheric ice nucleating particles and clouds were obtained, meanwhile the formation mechanisms for warm and mixed-phase clouds were investigated. A comparison of global mountainous observations reveals that the cloud droplet number concentration typically ranges from 106 to 500 cm^-3, and the liquid water content typically ranges from 0.01 to 0.3 g/m³. Both parameters exhibit slight increases with altitude. Despite similar observation heights, the mean cloud droplet number concentration and liquid water content observed on Mount Lu were 45 cm^-3 and 0.05 g/m³ lower, respectively, than those observed on the Western Ghats of India, primarily due to monsoonal differences. Thus, cloud microphysical parameters are influenced by both regional climate and observation altitude. In terms of cloud formation mechanism, the research in European and American has focused on the characteristics of atmospheric ice nucleating particles and formation mechanism of mixed phase cloud due to high-altitude of observation stations, highlighting the important effects of factors (supercooled droplets and updrafts) on rimming and Bergeron processes as well as blowing snow mechanism. Warm clouds observation in mountainous areas have confirmed key processes, including collision, turbulence, and entrainment, as well as the vital roles of mid-sized cloud droplets and secondary peaks on precipitation formation. Frequent drizzle in mountain regions is closely associated with cloud condensation nucleus, ice nucleus, weak updraft, turbulence and high-humidity conditions. In contrast, China’s cloud physics observation stations are located near the top of the boundary layer and below the boundary layer, so early mountain cloud and fog observations in China captured fluctuations in warm cloud microphysics and environmental parameters, which accelerated the collision-coalescence processes critical for the generation of mid-sized cloud droplets. So early mountain cloud observations have significantly contributed to advancing warm cloud fluctuations theories. Finally, prospects and suggestions are proposed for the cloud observation technologies and studies in mountainous regions.