We investigated the effect of the assimilation of altimeter satellite data in the third-generation ocean wave model WAM. We used a sequential method, where analyzed significant wave height fields are created by optimum interpolation, and the analyzed values are then used to construct the analyzed wave spectrum. The method provides also an estimate of the surface stress showing the possibility of using the analysis of the wave spectrum to derive an analyzed surface stress field. In a first set of numerical experiments, the data, provided by the Seasat altimeter, have been assimilated in the WAM model for 11/2 days. The comparison between model results and satellite data during the continuation of the run shows a positive and persistent impact of the assimilation. In a second set of numerical experiments, Geosat altimeter data were assimilated for 10 days and the resulting analysis was compared with buoy data. Although the assimilation improves the model results, it is not capable of compensating the differences between model and buoys. Some failures are clearly derived from the absence in the satellite data of the high-wave events that were reported by the buoys. Other failures may be the consequence of an excessive swell attenuation in the WAM model, which compromises the effect of a previous correction. In fact, the comparison of WAM model results with altimeter data suggests that there is a tendency of the model to overevaluate initially the wind sea, and successively to overestimate the decay of the wave energy, when the waves leave the area of the storm. ¿ American Geophysical Union 1992