In this work, the impact of assimilation of conventional and satellite remote sensing observations (Oceansat-2 winds, MODIS temperature/humidity profiles) is studied on the simulation of two tropical cyclones in the Bay of Bengal region of the Indian Ocean using a three-dimensional variational data assimilation (3DVAR) technique. The Weather Research and Forecasting (WRF)-Advanced Research WRF (ARW) mesoscale model is used to simulate the severe cyclone JAL: 5–8 November 2010 and the very severe cyclone THANE: 27–30 December 2011 with a double nested domain configuration and with a horizontal resolution of 27 × 9 km. Five numerical experiments are conducted for each cyclone. In the control run (CTL) the National Centers for Environmental Prediction global forecast system analysis and forecasts available at 50 km resolution were used for the initial and boundary conditions. In the second (VARAWS), third (VARSCAT), fourth (VARMODIS) and fifth (VARALL) experiments, the conventional surface observations, Oceansat-2 ocean surface wind vectors, temperature and humidity profiles of MODIS, and all observations were respectively used for assimilation. Results indicate meager impact with surface observations, and relatively higher impact with scatterometer wind data in the case of the JAL cyclone, and with MODIS temperature and humidity profiles in the case of THANE for the simulation of intensity and track parameters. These relative impacts are related to the area coverage of scatterometer winds and MODIS profiles in the respective storms, and are confirmed by the overall better results obtained with assimilation of all observations in both the cases. The improvements in track prediction are mainly contributed by the assimilation of scatterometer wind vector data, which reduced errors in the initial position and size of the cyclone vortices. The errors are reduced by 25, 21, 38 % in vector track position, and by 57, 36, 39 % in intensity, at 24, 48, 72 h predictions, respectively, for the two cases using assimilation of all observations. Simulated rainfall estimates indicate that while the assimilation of scatterometer wind data improves the location of the rainfall, the assimilation of MODIS profiles produces a realistic pattern and amount of rainfall, close to the observational estimates.