Initial and model uncertainties are the main sources of forecast errors, making the single and deterministic forecasts unreliable. To estimate these uncertainties, a growing consensus shifts towards ensemble forecasting, aiming to provide the probability density distribution of the atmosphere. However, current ensemble methods either focus on single-source uncertainties or employ a simple superposition of the two, neglecting the nonlinear interaction between them, and thus fail to reflect the real forecast uncertainty. Motivated by this, this study extends the CNOP approach, defined as the optimal growth considering nonlinear interaction between initial and model parameters, to the scenario of ensemble forecasts and proposes an orthogonal CNOPs method (O-CNOP-IPs). This method concerns the nonlinear effect of initial and model parametric uncertainties through a joint optimization strategy and enhances the estimation of this effect by providing diversity and independent CNOPs (via orthogonality). To evaluate the performance of O-CNOP-IPs, extensive experiments are conducted for North Atlantic Oscillation (NAO) ensemble forecasts in the realistically configured Community Earth System Model (CESM). Our findings reveal that the O-CNOP-IPs method outperforms existing methods in forecast skill and reliability, improving deterministic skill by 17.5 % and probabilistic skill by 52 %–63 %. Our dynamic analysis also unveils that this method undergoes rapid development in the early stage and effectively neutralizes errors in control forecasts, significantly enhancing the reliability of ensemble forecasts. It is expected that O-CNOP-IPs plays a significant role in accurately representing the forecast uncertainty of other high-impact weather and climate phenomena.