We will present an Air-Sea Interface Model (ASIM) which accounts for all of the above physical processed and is embedded into a hurricane-wave-ocean coupled model. Our results show that the drag coefficient is spatially variable and is generally reduced at very high wind speeds under hurricanes, consistent with recent observations. We have found that the momentum and TKE fluxes into ocean currents may be significantly less than the fluxes from air when the wave field is growing and extracting momentum and TKE. The spatial variation of the hurricane-induced surface waves plays an important role in reducing the momentum and TKE fluxes into subsurface currents in the rear-right quadrant of the hurricane. In an idealized Category 3 tropical cyclone moving with a forward speed of 5 ms-1, wave-current interaction can reduce the momentum flux into the currents up to 10% relative to the flux from the wind. The reduction in the momentum flux into the ocean due to the variation of the surface gravity wave field (both in time and space) and wave-current interaction consequently reduces the magnitude of subsurface current and SST cooling to the right of the storm track and lessens mixed layer deepening in the wake of a TC. This highlights the significance of the air-sea flux budget analysis in coupled models. Results of three case studies in Hurricane Ivan (2004) suggest that including the effect of wave-current interaction helps to improve the wave forecasts.