Abstract Coupled data assimilation (DA) provides a consistent framework for assimilating satellite observations that are sensitive to several components of the Earth system. In this paper, we focus on low-peaking infrared satellite channels that are sensitive to the lower atmosphere and Earth surface temperature (EST) over both ocean and land. Our atmospheric hybrid-4DVAR system [the Navy Global Environmental Model (NAVGEM)] is extended to include the following: 1) variability in the sea surface temperature (both diurnal variability and climatological perturbations to the ensemble members), 2) the coupled Jacobians of the radiative transfer model for the infrared sensors, and 3) the coupled covariances between the EST and the atmosphere. Our coupling approach is found to improve forecast accuracy and to provide corrections to the EST that are in balance with the atmospheric analysis. The largest impact of the coupling is found on near-surface atmospheric temperature and humidity in the tropics, but the impact extends all the way to the stratosphere. The role of each coupling element on the performance of the global atmospheric circulation model is investigated. Inclusion of variability in the sea surface temperature has the strongest positive impact on the forecast quality. Additional inclusion of the coupled Jacobian and ensemble-based coupled covariances led to further improvements in scores and to modification of the corrections to the ocean boundary layer. Coupled DA had significant impact on latent and sensible heat fluxes over land, locations of western boundary currents, and along the ice edge.