Cold wakes left behind by tropical cyclones (TCs) have been documented since the 1940s. Many questions remain, however, regarding the details of the processes creating these cold wakes and their in-storm feedbacks onto tropical cyclone intensity. This largely reflects a paucity of measurements within the ocean, especially during storms. Moreover, the bulk of TC research efforts have investigated deep ocean processes—where tropical cyclones spend the vast majority of their lifetimes—and very little attention has been paid to coastal ocean processes despite their critical importance to shoreline populations. Using Hurricane Irene (2011) as a case study, the impact of the cooling of a stratified coastal ocean on storm intensity, size, and structure is quantified. Significant ahead-of-eye-center cooling (at least 6°C) of the Mid-Atlantic Bight occurred as a result of coastal baroclinic processes, and operational satellite SST products and existing coupled ocean–atmosphere hurricane models did not capture this cooling. Irene’s sensitivity to the cooling is tested, and its intensity is found to be most sensitive to the cooling over all other tested WRF parameters. Further, including the cooling in atmospheric modeling mitigated the high storm intensity bias in predictions. Finally, it is shown that this cooling—not track, wind shear, or dry air intrusion—was the key missing contribution in modeling Irene’s rapid decay prior to New Jersey landfall. Rapid and significant intensity changes just before landfall can have substantial implications on storm impacts—wind damage, storm surge, and inland flooding—and thus, coastal ocean processes must be resolved in future hurricane models.