The GFDL/URI coupled hurricane prediction system has been used operationally at the National Centers for Environmental Prediction (NCEP) since 2001. We will present a new ocean data assimilation and initialization procedure that has been recently developed for more realistic simulations of the structure of the Gulf Stream and Loop Current in the Atlantic basin. In contrast to the presently used operational procedure the new one is based on a "feature modeling" approach and can be used in a large computational domain which includes the Caribbean Sea, the Gulf of Mexico, and the Gulf Stream region. It will be shown that the new procedure is not only computationally more efficient but also leads to improved hurricane and ocean forecasts.