In this paper, the vertical resolution for Tropospheric Emission Spectrometer (TES) nadir ozone retrievals is established and is used to assess the ability of TES to capture time variations of ozone in the troposphere. This characterization is based on retrievals of ozone using simulated radiances generated from ozonesonde profiles taken over Bermuda from 14 April to 25 May 1993. To that end, a two-step retrieval strategy that includes an initial estimate of the shape of the ozone followed by a finer-resolution estimate was developed to provide rapid and robust convergence against large deviations of ozone profiles in the troposphere and lower stratosphere relative to a climatology. An error analysis is derived that accurately accounts for representation errors of the profile, choices of regularization, and the dependence of the retrieval error on both the statistics of the profile and spectral measurement noise, as well as the sensitivity of these retrievals to errors in temperature. This analysis shows that TES should be able to retrieve ozone in the nadir with an approximately 6 km resolution in the troposphere. The root-mean square errors in estimates of the upper and lower tropospheric columns are about 1.35 Dobson units (DU) each. With this vertical resolution, TES would have the sensitivity to detect both the enhanced and reduced tropospheric ozone present in the Bermuda data set. Coupled with a 2-day near-repeat orbit and global coverage, TES retrievals of ozone could provide invaluable information to distinguish between anthropogenic and meteorological sources for the time variability of ozone in the troposphere.