Abstract Glider observations were essential components of the observational program in the Autonomous Ocean Sampling Network (AOSN-II) experiment in the Monterey Bay area during summer of 2003. This paper is focused on the impact of the assimilation of glider temperature and salinity observations on the Navy Coastal Ocean Model (NCOM) predictions of surface and subsurface properties. The modeling system consists of an implementation of the NCOM model using a curvilinear, orthogonal grid with 1–4 km resolution, with finest resolution around the bay. The model receives open boundary conditions from a regional (9 km resolution) NCOM implementation for the California Current System, and surface fluxes from the Coupled Ocean–Atmosphere Mesoscale Prediction System (COAMPS) atmospheric model at 3 km resolution. The data assimilation component of the system is a version of the Navy Coupled Ocean Data Assimilation (NCODA) system, which is used for assimilation of the glider data into the NCOM model of the Monterey Bay area. The NCODA is a fully 3D multivariate optimum interpolation system that produces simultaneous analyses of temperature, salinity, geopotential, and vector velocity. Assimilation of glider data improves the surface temperature at the mooring locations for the NCOM model hindcast and nowcasts, and for the short-range (1–1.5 days) forecasts. It is shown that it is critical to have accurate atmospheric forcing for more extended forecasts. Assimilation of glider data provided better agreement with independent observations (for example, with aircraft measured SSTs) of the model-predicted and observed spatial distributions of surface temperature and salinity. Mooring observations of subsurface temperature and salinity show sharp changes in the thermocline and halocline depths during transitions from upwelling to relaxation and vice versa. The non-assimilative run also shows these transitions in subsurface temperature; but they are not as well defined. For salinity, the non-assimilative run significantly differs from the observations. However, the glider data assimilating run is able to show comparable results with observations of thermocline as well as halocline depths during upwelling and relaxation events in the Monterey Bay area. It is also shown that during the relaxation of wind, the data assimilative run has higher value of subsurface velocity complex correlation with observations than the non-assimilative run.