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Reconfigurable computing is an enabling technology for real-time image processing onboard remote sensing satellites. This can potentially reduce the delay between image capture, analysis and action, and also reduce onboard storage and downlink capacity requirements. This paper discusses the design and implementation of a real-time cloud detection system intended for use within an onboard remote sensing platform. The High Performance Computing (HPC-1) payload, designed and developed for the Australian scientific satellite FedSat, is briefly introduced as a demonstration of onboard processing in space using reconfigurable logic. A high level conceptual design of the proposed remote sensing system is provided, before details of the cloud detection design and implementation are presented. Results from simulation and testing demonstrate very promising performance in terms of data throughput and detection capabilities.