The formation of clouds affects brown dwarf and planetary atmospheres of nearly all effective temperatures . Iron and silicate condense in L dwarf atmospheres and dissipate at the L/T transition . Minor species such as sulfides and salts condense in mid-late T dwarfs . For brown dwarfs below T _ { eff } \sim 450 K , water condenses in the upper atmosphere to form ice clouds . Currently over a dozen objects in this temperature range have been discovered , and few previous theoretical studies have addressed the effect of water clouds on brown dwarf or exoplanetary spectra . Here we present a new grid of models that include the effect of water cloud opacity . We find that they become optically thick in objects below T _ { eff } \sim 350–375 K. Unlike refractory cloud materials , water ice particles are significantly non-gray absorbers ; they predominantly scatter at optical wavelengths through J band and absorb in the infrared with prominent features , the strongest of which is at 2.8 µm . H _ { 2 } O , NH _ { 3 } , CH _ { 4 } , and H _ { 2 } CIA are dominant opacity sources ; less abundant species such as may also be detectable , including the alkalis , H _ { 2 } S , and PH _ { 3 } . PH _ { 3 } , which has been detected in Jupiter , is expected to have a strong signature in the mid-infrared at 4.3 µm in Y dwarfs around T _ { eff } =450 K ; if disequilibrium chemistry increases the abundance of PH _ { 3 } , it may be detectable over a wider effective temperature range than models predict . We show results incorporating disequilibrium nitrogen and carbon chemistry and predict signatures of low gravity in planetary-mass objects . Lastly , we make predictions for the observability of Y dwarfs and planets with existing and future instruments including the James Webb Space Telescope and Gemini Planet Imager .