The sensitivity of the climate system to an imposed radiative imbalance remains the largest source of uncertainty in projections of future anthropogenic climate change. Here we present further evidence that this uncertainty from an observational perspective is largely due to the masking of the radiative feedback signal by internal radiative forcing, probably due to natural cloud variations. That these internal radiative forcings exist and likely corrupt feedback diagnosis is demonstrated with lag regression analysis of satellite and coupled climate model data, interpreted with a simple forcing-feedback model. While the satellite-based metrics for the period 2000–2010 depart substantially in the direction of lower climate sensitivity from those similarly computed from coupled climate models, we find that, with traditional methods, it is not possible to accurately quantify this discrepancy in terms of the feedbacks which determine climate sensitivity. It is concluded that atmospheric feedback diagnosis of the climate system remains an unsolved problem, due primarily to the inability to distinguish between radiative forcing and radiative feedback in satellite radiative budget observations. View Full-Text