Abstract: Atmospheric components (aerosol and molecules) scatter and absorb solar radiation. The massive forest fire in 2004 affected the Penang Island region. The Environment of Department of Malaysia notified that the Prai area as unhealthy air quality level on 21 June 2004. This study investigated the used of a handheld spectroradiometer for the retrieval of Atmospheric Optical Thickness (AOT) values over Penang Island. The transmittance values were measured using a handheld spectroradiometer over Penang Island on 11th April 2004. The transmittance values were measured in spectral region from 350 to 1050 nm at the earth surface. We selected the values at 550 nm for the present analysis. This study introduces an economical and a simple technique for retrieval of AOT for remote sensing application. The transmittance values were measured around the Penang Island. The concentrations of particulate matter of less than 10 micron (PM10) were measured simultaneously with the measurements of the transmittance data. The locations were determined with a Global Positioning System (GPS) receiver. The relationship between AOT and PM10 were investigated and we obtained a linear relationship between these two parameters. Finally, an interpolating technique was used to generate AOT and PM10 maps over Penang Island.