The absorption by atmospheric nitrogen dioxide (NO2) gas in the visible has been traditionally neglected in the retrieval of oceanic parameters from satellite measurements. Recent measurements of NO2 from spaceborne sensors show that over the Eastern United States the NO2 column amount often exceeds 1 Dobson Unit (approximately 2.69x10(16) molecules/cm2). Our radiative transfer sensitivity calculations show that under high NO2 conditions (approximately 1x10(16) molecules/cm2) the error in top-of-atmosphere (TOA) reflectance in the blue channels of the sea-viewing wide field-of-view sensor (SeaWiFS) and moderate-resolution imaging spectroradiometer (MODIS) sensors is approximately 1%. This translates into approximately 10% error in water-leaving radiance for clear waters and to higher values (>20%) in the coastal areas. We have developed an atmospheric-correction algorithm that allows an accurate retrieval of normalized water-leaving radiances (nLws) in the presence of NO2 in the atmosphere. The application of the algorithm to 52 MODIS scenes over the Chesapeake Bay area show a decrease in the frequency of negative nLw estimates in the 412 nm band and an increase in the value of nLws in the same band. For the particular scene reported in this paper, the mean value of nLws in the 412 nm band increased by 17%, which is significant, because for the MODIS sensor the error in nLws attributable to the digitization error in the observed TOA reflectance over case 2 waters is approximately 2.5%.