Billow clouds are created from instability associated with flows having marked vertical shear and weak thermal stratification. The common name for this instability is Kelvin-Helmholtz instability. One may visualize these instabilities as a row of horizontal eddies aligned within this layer of vertical shear.

Billow clouds are created in the upward branch of each of the eddies if the air within this branch has a high enough relative humidity that, upon lifting, the air parcel reaches saturation. Individual billow clouds generally have life times of a few minutes. The presence of billow clouds provides a visible signal to aviation interests of potentially dangerous turbulence.