Bathymetric lidar has been widely used for ocean floor mapping. By identifying two distinctive return peaks, one from the water surface and the other from the bottom, the water depth can be estimated. In addition to bathymetry, it is also possible to estimate the optical properties of the water by analyzing the lidar return waveform. Only the few systems (e.g. Optech’s SHOALS and CZMIL systems) that have good radiometric calibration demonstrate the capability to product the water’s inherent optical properties and bottom reflectance. As the laser pulse propagates through the water, it is scattered by the water constituents. The directional distribution of scattered radiant power is determined by the volume scattering function. Only the backscattering within a very narrow solid angle around the 180° scattering angle travels back to the detector. During the two-way travel it experiences the same optical interaction (absorption and scattering) with the water constituents. Thus, the lidar return waveform between the surface and bottom peak contains information about the vertical distribution of the water attenuation coefficient and the backscattering coefficient in the form of the rate of change of the return power. One challenge is how to estimate the inherent attenuation from the apparent attenuation. In this research we propose a technique to estimate the true water attenuation coefficient from the total system attenuation. We use a lidar waveform simulator that solves the irradiance distribution on the beam cross-section using an analytical Fourier transform of the radiance based on a single-scattering approximation.