Warm air turns the water from rivers, lakes, and oceans into water vapor that rises into the air. That water vapor forms clouds, which contain small drops of water or ice crystals (depending on how high the cloud is and how cold it is).
As clouds rise higher and higher, the air gets colder and colder. When the water vapor in the cloud becomes too heavy, it falls back to the ground as rain or snow.
To learn more about the water cycle, visit these sites:
Sesame Workshop: Weather
This explanation was written for parents, who often get asked "Why is the sky blue?" or "Why does it rain?" But it's great for kids, too. Be sure to ask a parent for help with the experiment.