The ocean data assimilation system in Coupled Ocean/Atmosphere Mesoscale Prediction System (COAMPSTM) comprises a three-dimensional Multivariate Optimum Interpolation (MVOI) ocean analysis, a hydrostatic ocean forecast model and a flux-coupler used to drive the ocean circulation model using consistent surface forcing derived from an atmospheric model. The ocean model used here is the NRL Coastal Ocean Model (NCOM). The ocean data assimilation system in COAMPSTM is relocatable and can be executed in real time using high frequency atmospheric forcing from COAMPSTM and lateral boundary conditions from Global NCOM. The lateral boundary conditions are updated every 3h in COAMPS, which enables large-scale processes to smoothly enter through the boundaries. The observations assimilated in this study includes data from the Global Ocean Data Assimilation Experiment (GODAE) database available from the Fleet Numerical Meteorology and Oceanography Center (FNMOC) and special field observations collected during the Autonomous Ocean Sampling Network II (AOSN II) program. In this study, assimilated data from the default database (GODAE) were shown to be sufficient to resolve and predict some large-scale aspects of the Monterey Bay circulation; however, the assimilation of the high-resolution AOSN II observations greatly enhanced the ability of the system to predict features with small spatio-temporal scales, such as upwelling, front and eddies.