Previous studies by Reddy et.al (2005) have indicated strong interactions of sea and atmosphere through surface fluxes (heat, momentum and latent heat) associated with the formation and development of tropical cyclone/hurricane activity over the Gulf of Mexico. We extend these investigations to study the variability of sea-air interactions to the hurricane Katrina, which began to strengthen reaching Category 5 strength on 28th August, 2005 about 250 miles South- Southeast of the mouth of Mississippi river and made land fall on the Miami-Dade/Broward county line. Katrina's winds reached their peak intensity of 175 mph and the pressure fell to 902 MB, the fourth lowest pressure on record. Later Katrina turned to the Northwest and then north, making landfall in Plaquemines Parish, Louisiana just South of Buras on 29th August 2005. NOAA GOES satellite, NDBC Buoy and NHC dropsonde data for sea surface temperature and meteorological variables including air temperature, wind speed and sea level pressure were used for computing surface fluxes. Weather Research Forecast (WRF) mesoscale model simulations are used for better understanding of the structure and dynamics of hurricane Katrina activity and compared model output with observations. The model is run on a doubly nested domain centered over the central Gulf of Mexico, with grid spacing of 90 km and 30 km for 6 hr periods, from August 28th to August 30th. The model is capable of simulating the surface features, intensity change and track associated with hurricane Katrina. The study suggested strong heat and latent heat fluxes with heaviest rainfalls as Katrina changes its intensity while making landfall.