Taking into account Poisson, background, amplifier, and speckle noise, we can simulate the precision of water-vapor measurements by using a 10-W average-power differential absorption lidar (DIAL) system. This system is currently under development at Hohenheim University, Germany, and at the American National Center for Atmospheric Research. For operation in the 940-nm region, a large set of measurement situations is described, including configurations that are considered for the first time to the authors' knowledge. They include ultrahigh-resolution measurements in the surface layer (resolutions, 1.5 m and 0.1 s) and vertically pointing measurements (resolutions, 30 m and 1 s) from the ground to 2 km in the atmospheric boundary layer. Even during daytime, the DIAL system will have a measurement range from the ground to the upper troposphere (300 m, 10 min) that can be extended from a mountain site to the lower stratosphere. From the ground, for the first time of which the authors are aware, three-dimensional fields of water vapor in the boundary layer can be investigated within a range of the order of 15 km and with an averaging time of 10 min. From an aircraft, measurements of the atmospheric boundary layer (60 m, 1 s) can be performed from a height of 4 km to the ground. At higher altitudes, up to 18 km, water-vapor profiles can still be obtained from aircraft height level to the ground. When it is being flown either in the free troposphere or in the stratosphere, the system will measure horizontal water-vapor profiles up to 12 km. We are not aware of another remote-sensing technique that provides, simultaneously, such high resolution and accuracy.