We present a new algorithm with which to determine near-sea surface air temperature from satellite observations. A relationship between air temperature, sea surface temperature (SST), wind speed, and humidity is obtained from the aerodynamical equation and the bulk formula. We solve air temperature from this relationship by giving other variables with the observations and without explicit assumption of boundary layer parameters. Our new method is validated using observed monthly mean data at the Japan Meteorological Agency (JMA) and Tropical Ocean-Global Atmosphere (TOGA)-Tropical Atmosphere Ocean (TAO) buoys. Air temperature and sensible heat flux can be determined with accuracies of 0.0¿¿1.2 ¿C and 0.1¿8.7 W/m2, respectively, when SST, wind speed, and humidity are given by in situ observations. In order to retrieve near-sea surface air temperature and sensible heat flux from satellite data, SST is obtained from multi channel sea surface temperature (MCSST) of advanced very high resolution radiometer (AVHRR), wind speed is obtained from special sensor microwave/imager (SSM/I), and humidity is obtained from SSM/I together with the empirical equation proposed by Liu <1986>. An error of monthly mean satellite-derived air temperature is -0.3¿¿3.1 ¿C, and that of sensible heat flux is 10.0¿37.6 W/m2. Errors of both satellite-derived values are enlarged, possibly because the satellite observations have seasonably systematic error. Time evolution of the interannual variation of air temperature estimated by satellite agrees well with that of in situ measurements. The estimation error of the interannual variation of air temperature is 0.0¿¿1.5 ¿C, and that of sensible heat flux is 0.3¿19.0 W/m2. At an interannual timescale the satellite-derived sensible heat flux catches the time evolution of the in situ observation. Both the air temperature and the sensible heat flux obtained by using our method have fewer errors than estimations made by assuming relative humidity as the climatological mean value. ¿ American Geophysical Union 1996