Altocumulus undulatus occurs when a layer of altocumulus cloud is affected by wind shear. The mechanism is the same as that which gives rise to altostratus undulatus. The altocumulus variation consists of parallel bands of cumulus clouds. These may form in patches or extend over a wide area of the visible sky. When the bands form close together, they often resemble ripples on the surface of a pond.

Altocumulus undulatus is distinguished from altostratus undulatus by its discernible cumuliform texture. As with all cumulus clouds, this is a result of a certain amount of instability at cloud level, which gives rise to further uplift at various points within the cloud. These clouds always indicate the presence of significant amounts of moisture at middle levels, and, if on the increase, may signal the approach of a frontal system. If the cloud deck is sufficiently thick, this formation can produce rain, or snow in sub-zero temperatures. Often, altocumulus undulatus occurs together with altostratus formations in a mixed sky. In such cases, it may be difficult to discern which cloud formation is producing the precipitation.

All undulatus clouds are regarded by those in the aviation industry as a sign of turbulence. However, altocumulus undulatus seldom gives rise to anything more than slight to moderate turbulence and is therefore not regarded as a danger by pilots.