AIRS was launched on EOS Aqua on May 4, 2002, together with AMSU A and HSB, to form a next generation polar orbiting infrared and microwave atmospheric sounding system. The primary products of AIRS/AMSU are twice daily global fields of atmospheric temperature-humidity profiles, ozone profiles, sea/land surface skin temperature, and cloud related parameters including OLR. The sounding goals of AIRS are to produce 1 km tropospheric layer mean temperatures with an rms error of 1 K, and layer precipitable water with an rms error of 20 percent, in cases with up to 80 percent effective cloud cover. The basic theory used to analyze AIRS/AMSU/HSB data in the presence of clouds, called the at-launch algorithm, and a post-launch algorithm which differed only in the minor details from the at-launch algorithm, have been described previously. The post-launch algorithm, referred to as AIRS Version 4.0, has been used by the Goddard DAAC to analyze and distribute AIRS retrieval products. In this paper we show progress made toward the AIRS Version 5.0 algorithm which will be used by the Goddard DAAC starting late in 2006. A new methodology has been developed to provide accurate case by case error estimates for retrieved geophysical parameters and for the channel by channel cloud cleared radiances used to derive the geophysical parameters from the AIRS/AMSU observations. These error estimates are in turn used for quality control of the derived geophysical parameters and clear column radiances. Improvements made to the retrieval algorithm since Version 4.0 are described as well as results comparing Version 5.0 retrieval accuracy and spatial coverage with those obtained using Version 4.0.