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The performance of the wave model WAVEWATCH III under a very strong, category 5, tropical cyclone wind forcing is investigated with different drag coefficient parameterizations and ocean current inputs. The model results are compared with field observations of the surface wave spectra from an airborne scanning radar altimeter, National Data Buoy Center (NDBC) time series, and satellite altimeter measurements in Hurricane Ivan (2004). The results suggest that the model with the original drag coefficient parameterization tends to overestimate the significant wave height and the dominant wavelength and produces a wave spectrum with narrower directional spreading. When an improved drag parameterization is introduced and the wave–current interaction is included, the model yields an improved forecast of significant wave height, but underestimates the dominant wavelength. When the hurricane moves over a preexisting mesoscale ocean feature, such as the Loop Current in the Gulf of Mexico or a warm- and cold-core ring, the current associated with the feature can accelerate or decelerate the wave propagation and significantly modulate the wave spectrum.