A Rayleigh/Mie lidar system deployed at the Sondrestrom Atmospheric Research Facility located on the west coast of Greenland near the town of Kangerlussuaq (67.0 deg N, 50.9 deg W) has been in operation since 1993 making unique observations of the arctic middle atmosphere. The vertically directed lidar samples the elastically backscattered laser energy from molecules (Rayleigh) and aerosols (Mie) over the altitude range from 15 to 90 km at high spatial resolution. The limited amount of arctic observations of the middle atmosphere currently available emphasizes the importance and utility of a permanent Rayleigh lidar system in Greenland. The lidar system consists of a frequencydoubled, 17-W Nd:YAG laser at 532 nm, a 92 cm Newtonian telescope, and a two-channel photon counting receiver. The principal objective of the lidar project is to contribute to studies concerned with the climatology and phenomenology of the arctic middle atmosphere. To this end, we describe the lidar system in detail, evaluate system performance, describe data analysis, and discuss the system capabilities in determining the density, temperature, and the presence of aerosols in the arctic middle atmosphere. Particular emphasis is placed on the derivation of temperature from the lidar measurement and on the impact of signalinduced noise on this analysis. Also, we develop a statistical filter based on a Bayesian approach to optimally smooth the lidar profile in range. This filter preserves the short-term fluctuations in the low-altitude data consisting of relatively high SNR, whereas more smoothing is applied to the high-altitude data as the SNR decreases.