Canopy leaf area index (LAI) is an important structural parameter of the vegetation controlling pollutant uptake by terrestrial ecosystems. This paper presents a computationally efficient algorithm for retrieval of vegetation LAI and canopy clumping factor from satellite data using observed Simple Ratios (SR) of near-infrared to red reflectance. The method employs numerical inversion of a physics-based analytical canopy radiative transfer model that simulates the bi-directional reflectance distribution function (BRDF). The algorithm is independent of ecosystem type. The method is applied to 1-km resolution AVHRR satellite images to retrieve a geo-referenced data set of monthly LAI values for the conterminous USA. Satellite-based LAI estimates are compared against independent ground LAI measurements over a range of ecosystem types. Verification results suggest that the new algorithm represents a viable approach to LAI retrieval at continental scale, and can facilitate spatially explicit studies of regional pollutant deposition and trace gas exchange.