For the past few decades, numerous investigations have been reported on optical propagation in the turbulent atmosphere. In recent years, however, the theoretical study of optical propagation in fog, clouds, and other particulate matter has attracted considerable attention. Though much progress has been reported in the theoretical study of these phenomena, there are several areas where the theory is still not conclusive and further investigations are needed. This paper presents a review of the present state-of-the-art in the theory of optical propagation in the atmosphere and some discussions on the future directions of investigations in this area. Both cw and pulse propagations are considered and the quantitative discussions are given on angular broadening, pulse broadening, and coherence bandwidth of the optical wave in the turbulence and the particulate matter. It is noted that the forward scatter approximations are valid for the turbulence case, but for the case of particulate matter, it is convenient to consider three regions: first-order scattering, forward scatter, and diffusion; and it is important to take into account the effects of transmitter and receiver characteristics.