The vertical component of position of the GEOS-3 satellite has been computed to an accuracy of 2 m by analysis of Doppler observations. Comparison of altimetry data from the satellite at the intersections of ground traces of the orbital path yielded corrections to the satellite position such that the contribution of the orbit error to the error in the geoid computed from the altimetry data would be as low as 20 to 30 cm if the original orbit errors were uncorrelated. However, simulations of the effects of uncertainties in the gravity field have shown that the orbit errors are correlated over a distance of about 500 km normal to the direction of the satellite track. As a consequence, the geoid based on the GEOS-3 altimetry will have correlated errors which are estimated to be 50 cm with a wave length of 2500 km. The results imply that the geoid based on SEASAT-A altimetry data will have correlated errors over similar distance.