The Cloud-Aerosol Lidar and Infrared Pathfinder Satellite Operations (CALIPSO) mission released version 4.1 (V4) of their lidar level 2 cloud and aerosol data products in November 2016. These new products were derived from the CALIPSO V4 lidar level 1 data, in which the calibration of the measured backscatter data at both 532 and 1064 nm was significantly improved. This paper describes updates to the V4 level 2 cloud-aerosol discrimination (CAD) algorithm that more accurately differentiate between clouds and aerosols throughout the Earth's atmosphere. The level 2 data products are improved with new CAD probability density functions (PDFs) that were developed to accommodate extensive calibration changes in the level 1 data. To enable more reliable identification of aerosol layers lofted into the upper troposphere and lower stratosphere , the CAD training dataset used in the earlier data releases was expanded to include stratospheric layers and representative examples of volcanic aerosol layers. The generic "stratospheric layer" classification reported in previous versions has been eliminated in V4, and cloud-aerosol classification is now performed on all layers detected everywhere from the surface to 30 km. Cloud-aerosol classification has been further extended to layers detected at single-shot resolution , which were previously classified by default as clouds. In this paper, we describe the underlying rationale used in constructing the V4 PDFs and assess the performance of the V4 CAD algorithm in the troposphere and stratosphere. Previous misclassifications of lofted dust and smoke in the tro-posphere have been largely improved, and volcanic aerosol layers and aerosol layers in the stratosphere are now being properly classified. CAD performance for single-shot layer detections is also evaluated. Most of the single-shot layers classified as aerosol occur within the dust belt, as may be expected. Due to changes in the 532 nm calibration coefficients , the V4 feature finder detects ∼ 9.0 % more features at night and ∼ 2.5 % more during the day. These features are typically weakly scattering and classified about equally as clouds and aerosols. For those tropospheric layers detected in both V3 and V4, the CAD classifications of more than 95 % of all cloud and daytime aerosol layers remain unchanged, as do the classifications of ∼ 89 % of nighttime aerosol layers. Overall, the nighttime net cloud and aerosol fractions remain unchanged from V3 to V4, but the daytime net aerosol fraction is increased by about 2 % and the daytime net cloud fraction is decreased by about 2 %.