The measurement of spray droplets size distribution and refractive index rainbow principle is studied. A novel inverse algorithm is presented, which can inverse droplets size distribution and refractive index simultaneously. The new algorithm, based on regularized non-negative least squares method (NNLS) and regularization method, which adjusts the refractive index and size distribution range during the inverse process according to the main rainbow peak positon and ratio of ridge and peak rainbow intensity, can inverse both droplets size distribution and refractive index simultaneously without pre-knowledge of droplets diameter distribution function and range. The algorithm and also can avoid mutli-sulution problems. Simulation results shows that even the signal noise ratio (SNR) drops to 5 dB, the inverse results of droplets size distribution coincide with the supposed distribution in most situations. The method has a relatively good precision and reliability.