Factor analysis is applied to multispectral (seventeen wavelengths) radiances simulated by a radiative transfer model (matrix-operator method) in and above coastal and open ocean waters. The calculated radiances were compared with measured radiances before applying factor analysis. They agree well for different sun elevations and even for turbid coastal waters. The factor analysis technique allows us to extract the characteristic signatures of phytoplankton, suspended matter, and yellow substance. The fluorescence of chlorophyll at lambda = 685 nm is found to be a clear signal for phytoplankton, also in the presence of other suspensions and yellow substance. A comparison of different algorithms for the extraction of the fluorescence peak favors the addition of chlorophyll absorption at lambda = 670 nm. The blue-green ratio is found to be useless for chlorophyll detection in coastal waters. Suspended matter and yellow substance can also clearly be seen in the factor loading for all multispectral radiances analyzed. However, suspended matter is reflected more strongly than yellow substance.