THIS REPORT summarizes goals, activities, and recommendations of a workshop on data assimilation held in Williamsburg, Virginia on September 9-11, 2003, and sponsored by the U.S. Office of Naval Research (ONR) and National Science Foundation (NSF). The overall goal of the workshop was to synthesize research directions for ocean data assimilation (DA) and outline efforts required during the next 10 years and beyond to evolve DA into an integral and sustained component of global, regional, and coastal ocean science and observing and prediction systems. The workshop built on the success of recent and existing DA activities such as those sponsored by the National Oceanographic Partnership Program (NOPP) and NSF-Information Technology Research (NSF-ITR). DA is a quantitative approach to optimally combine models and observations. The combination is usually consistent with model and data uncertainties, which need to be represented. Ocean DA can extract maximum knowledge from the sparse and expensive measurements of the highly variable ocean dynamics. The ultimate goal is to better understand and predict these dynamics on multiple spatial and temporal scales, including interactions with other components of the climate system. There are many applications that involve DA or build on its results, including: coastal, regional, seasonal, and inter-annual ocean and climate dynamics; carbon and biogeochemical cycles; ecosystem dynamics; ocean engineering; observing-system design; coastal management; fisheries; pollution control; naval operations; and defense and security. These applications have different requirements that lead to variations in the DA schemes utilized. For literature on DA, we refer to Ghil and Malanotte-Rizzoli (1991), the National Research Council (1991), Bennett (1992), Malanotte- Rizzoli (1996), Wunsch (1996), Robinson et al. (1998), Robinson and Lermusiaux (2002), and Kalnay (2003). We also refer to the U.S. Global Ocean Data Assimilation Experiment (GODAE) workshop on Global Ocean Data Assimilation: Prospects and Strategies (Rienecker et al., 2001); U.S. National Oceanic and Atmospheric Administration-Office of Global Programs (NOAA-OGP) workshop on Coupled Data Assimilation (Rienecker, 2003); and, NOAA-NASA-NSF workshop on Ongoing Analysis of the Climate System (Arkin et al., 2003).