A new algorithm has been developed for simultaneous retrieval of aerosol optical properties and chlorophyll concentrations in case I waters. This algorithm is based on an improved complete model for the inherent optical properties and accurate simulations of the radiative transfer process in the coupled atmosphere-ocean system. It has been tested against synthetic radiances generated for the Sea-Viewing Wide Field-of-View Sensor (SeaWiFS) channels and has been shown to be robust and accurate. A unique feature of this algorithm is that it uses the measured radiances in both near-IR and visible channels to find that combination of chlorophyll concentration and aerosol optical properties that minimizes the error across the spectrum. Thus the error in the retrieved quantities can be quantified.