This paper presents a method to estimate the sea state PSD (Power Spectral Density) of the current wave climate, by using the measured floater motion and the body hydrodynamic response. The knowledge of PSD and the sea state synthetic parameters derivable from the PSD, such as the Significant Wave Height and the Energy Period, is fundamental for the navigation and operation in naval field and also for the control strategies of the Wave Energy Converters (WEC). The ISWEC (Inertial Sea Wave Energy Converter) is used as case study for the validation of the sea state estimation method. ISWEC is a floating device using the inertial effects of a gyroscopic system to convert a floater motion into electric energy. Sea state parameters are used in the control of the device to tune gyroscope speed and the generator torque law to achieve maximum power absorption. The heave measurements are used to estimate the PSD of the incoming wave and it is compared with the wave PSD measured by a wave measurement system. The method is studied and validated for three different sea state cases. At this stage the method presents satisfying results, with an accuracy under the 10% of the estimated parameters. Such accuracy is comparable with the short term (1-3h) wave forecast produced by ECMWF.