From the Pilot’s Handbook of Aeronautical Knowledge:
The stability of the atmosphere depends on its ability to resist vertical motion. A stable atmosphere makes vertical movement difficult, and small vertical disturbances dampen out and disappear. In an unstable atmosphere, small vertical air movements tend to become larger, resulting in turbulent airflow and convective activity. Instability can lead to significant turbulence, extensive vertical clouds, and severe weather. Rising air expands and cools due to the decrease in air pressure as altitude increases. The opposite is true of descending air; as atmospheric pressure increases, the temperature of descending air increases as it is compressed. Adiabatic heating and adiabatic cooling are terms used to describe this temperature change.
The adiabatic process takes place in all upward and downward moving air. When air rises into an area of lower pressure, it expands to a larger volume. As the molecules of air expand, the temperature of the air lowers. As a result, when a parcel of air rises, pressure decreases, volume increases, and temperature decreases. When air descends, the opposite is true. The rate at which temperature decreases with an increase in altitude is referred to as its lapse rate. As air ascends through the atmosphere, the average rate of temperature change is 2 °C (3.5 °F) per 1,000 feet. Since water vapor is lighter than air, moisture decreases air density, causing it to rise. Conversely, as moisture decreases, air becomes denser and tends to sink. Since moist air cools at a slower rate, it is generally less stable than dry air since the moist air must rise higher before its temperature cools to that of the surrounding air. The dry adiabatic lapse rate (unsaturated air) is 3 °C (5.4 °F) per 1,000 feet. The moist adiabatic lapse rate varies from 1.1 °C to 2.8 °C (2 °F to 5 °F) per 1,000 feet. The combination of moisture and temperature determine the stability of the air and the resulting weather. Cool, dry air is very stable and resists vertical movement, which leads to good and generally clear weather. The greatest instability occurs when the air is moist and warm, as it is in the tropical regions in the summer. Typically, thunderstorms appear on a daily basis in these regions due to the instability of the surrounding air.
As air rises and expands in the atmosphere, the temperature decreases. There is an atmospheric anomaly that can occur; however, that changes this typical pattern of atmospheric behavior. When the temperature of the air rises with altitude, a temperature inversion exists. Inversion layers are commonly shallow layers of smooth, stable air close to the ground. The temperature of the air increases with altitude to a certain point, which is the top of the inversion. The air at the top of the layer acts as a lid, keeping weather and pollutants trapped below. If the relative humidity of the air is high, it can contribute to the formation of clouds, fog, haze, or smoke resulting in diminished visibility in the inversion layer. Surface-based temperature inversions occur on clear, cool nights when the air close to the ground is cooled by the lowering temperature of the ground. The air within a few hundred feet of the surface becomes cooler than the air above it. Frontal inversions occur when warm air spreads over a layer of cooler air, or cooler air is forced under a layer of warmer air.
From AC 006B:
Vertical Motion Effects on an Unsaturated Air Parcel. As a bubble or parcel of air ascends (rises), it moves into an area of lower pressure (pressure decreases with height). As this occurs, the parcel expands. This requires energy, or work, which takes heat away from the parcel, so the air cools as it rises. This is called an adiabatic process. The term adiabatic means that no heat transfer occurs into, or out of, the parcel. Air has low thermal conductivity, so transfer of heat by conduction is negligibly small.
The rate at which the parcel cools as it is lifted is called the lapse rate. The lapse rate of a rising, unsaturated parcel (air with relative humidity less than 100 percent) is approximately 3 °C per 1,000 feet (9.8 °C per kilometer). This is called the dry adiabatic lapse rate. This means for each 1,000-foot increase in elevation, the parcel’s temperature decreases by 3 °C. Concurrently, the dewpoint decreases approximately 0.5 °C per 1,000 feet (1.8 °C per kilometer). The parcel’s temperature-dewpoint spread decreases, while its relative humidity increases.
This process is reversible if the parcel remains unsaturated and, thus, does not lose any water vapor. A descending (subsiding) air parcel compresses as it moves into an area of higher pressure. The atmosphere surrounding the parcel does work on the parcel, and energy is added to the compressed parcel, which warms it. Thus, the temperature of a descending air parcel increases approximately 3 °C per 1,000 feet (9.8 °C per kilometer). Concurrently, the dewpoint increases approximately 0.5 °C per 1,000 feet (1.8 °C per kilometer). The parcel’s temperature-dewpoint spread increases, while its relative humidity decreases.
The parcel and the surrounding environmental air temperatures are then compared. If the lifted parcel is colder than the surrounding air, it will be denser (heavier) and sink back to its original level. In this case, the parcel is stable because it resists upward displacement. If the lifted parcel is the same temperature as the surrounding air, it will be the same density and remain at the same level. In this case, the parcel is neutrally stable. If the lifted parcel is warmer and, therefore, less dense (lighter) than the surrounding air, it will continue to rise on its own until it reaches the same temperature as its environment. This final case is an example of an unstable parcel. Greater temperature differences result in greater rates of vertical motion.