Abstract The large scatter of the drag coefficient CD at a given wind speed and its discrepancy in coastal regions and open oceans have received increasing attention. However, the parameterization of CD is still an open question, especially in coastal regions. Therefore, this study systematically investigated the influence of surface waves on wind stress based on in situ observations of surface waves and air–sea fluxes on three coastal tower-based platforms in different regions. A formulation that is a function of only wind speed was established in the wind speed range of 1–20 m s−1, and when extended to 30 m s−1, it could predict the saturation of coastal CD at a 20 m s−1 wind speed and then the attenuation. However, this wind-based formulation does not simulate the scatter of CD in practice. By further analyzing the effect of wave states on wind stress, the parameters of wave age and directionality of wind and waves were incorporated into the wind-based formulation, and a new wave-state-based parameterization on CD was proposed, which can estimate the widely spread CD values to a large extent and the saturation of CD. The RMSE between this new parameterization and observations reduce approximately 20% and 9% relative to the COARE and wind-based formula. The applicability of this new parameterization was further demonstrated through a comparison between the newly parameterized CD and observed asymmetric CD in different quadrants of a tropical cyclone. The wave-state-based parameterization scheme requires three parameters, wind speed U10, wave age β, and wave off-wind angle θ, and it is expected to be applied to coastal regions. Significance Statement Wind stress over the ocean plays an important role in numerical simulations for both the atmosphere and ocean, which requires accurate parameterization. However, parameterization of wind stress or drag coefficient CD is still an open question due to the complexity of the potential factors behind wind stress, especially for coastal regions. This manuscript provided a new wave-state-based parameterization scheme at low to high wind speeds for coastal regions, based on field observations on three coastal towers. This new parameterization can predict the saturation of CD at a wind speed of 20 m s−1 and then the attenuation, agreeing well with the previous coastal observations, and simulate the large scatter of CD to a large extent. Furthermore, it can predict the asymmetric CD in different quadrants of a tropical cyclone, consistent with the observations. This parameterization scheme requires only three parameters, wind speed, wave age, and misalignment angle between wind and wave, which can be conveniently applied to the numerical models.