* No new substances are formed: Clouds are made of water vapor that has condensed into tiny water droplets or ice crystals. The water molecules themselves haven't changed their chemical composition.

* The change is reversible: Clouds can dissipate back into water vapor, which is the gaseous state of water.

Chemical changes involve the formation of new substances with different chemical properties. Examples of chemical changes include burning wood, rusting iron, or baking a cake.

Key Takeaway: Cloud formation is a physical change because it involves a change in the state of matter (gas to liquid/solid) but not a change in the chemical composition of the water molecules.