High-resolution optical remote sensing imagery plays a crucial role in monitoring the Earth’s surface. However, cloud obstruction and spectral confusion between clouds and snow significantly compromise data quality and application reliability, leading to persistent cloud overestimation in optical remote sensing products. To address this challenge, this study developed an enhanced multi-threshold cloud detection algorithm based on AVHRR surface reflectance data, which incorporates dynamic threshold optimization within a multi-level decision tree framework. Utilizing Landsat 5 SR as reference data, the algorithm demonstrated superior cloud-snow discrimination capability, achieving an overall accuracy (OA) of 82.08%, with the user’s accuracy (UA) and F-score reaching 79.41% and 82.55%. Comparative evaluation demonstrates that the proposed algorithm outperforms two existing algorithms, with OA improvements of 17.42% and 7.93%, respectively. A particularly notable enhancement is the significant reduction in cloud misidentification, as reflected by UA increases of 21.02% and 13.21%. These improvements are most pronounced in high-altitude mountainous regions with snow cover. The algorithm maintains computational efficiency while providing reliable cloud masking, thereby offering enhanced support for snow cover monitoring and broader environmental applications.