In aerial images, the performance of the segmentation and object recognition algorithms could suffer due to shadows in the scene. This effort describes a novel shadow restoration algorithm based on atmospheric effects and characteristics of sun light for aerial images. Firstly, shadow regions are detected exploiting the Rayleigh scattering phenomena and the well-known fact related to the low illumination intensity in the shadow regions. After detection, shadow restoration is achieved by first restoring partially occluded shadow areas, as a result of modeling these transition regions with a continuous function that considers shadow formations. Next, fully occluded shadow regions are restored by first segmenting the image into multiple uniformly illuminated regions, then multiplying the intensity values in these regions with a constant, which is determined by the ratio of intensities between each segment and its non-shadow neighborhood. The simulation results indicate improvements over similar work fro the literature.