Abstract. Use of a compact, low power commercial lidar onboard a small aircraft for aerosol studies is demonstrated. A Micro Pulse Lidar fitted upside down in a Beech Superking aircraft is used to measure the vertical distribution of aerosols in and around Hyderabad, an urban location in the central India. Two sorties were made, one on 17 February 2004 evening hours and the other on 18 February 2004 morning hours for a total flight duration of four hours. Three different algorithms, proposed by Klett (1985), Stephens et al. (2001) and Palm et al. (2002) for deriving the aerosol extinction coefficient profile from lidar data are studied and is shown that the results obtained from the three methods compare within 2%. The result obtained from the airborne lidar is shown more useful to study the aerosol distribution in the free troposphere than that obtained by using the same lidar from ground. Using standard radiative transfer model the aerosol radiative forcing is calculated and is shown that knowledge on the vertical distribution of aerosols is very important to get more realistic values than using model vertical profiles of aerosols. We show that for the same aerosol optical depth, single scattering albedo and asymmetry parameter but for different vertical profiles of aerosol extinction the computed forcing values differ with increasing altitude and improper selection of the vertical profile can even flip the sign of the forcing at tropopause level.