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Hurricane Michael formed on October 7, 2018, in the Northwestern Caribbean Sea, and quickly traveled northward through the Gulf of Mexico, making landfall on the Florida panhandle as a devastating Category 5 hurricane only 3 days later. Before landfall, Michael underwent rapid intensification, despite unfavorable atmospheric conditions. Using observations, we characterized the key ocean features encountered by Michael along its track, which are known for favoring hurricane intensification: high sea surface temperatures, upper ocean heat content and low salinity barrier layer conditions. Ocean observations were consistent with suppressed hurricane‐induced upper ocean cooling, which could only be observed by underwater gliders, and showed that Hurricane Michael constantly experienced sea surface temperatures above 28°C. We carried out ocean Observing System Experiments, which demonstrate that the combined assimilation of in situ and satellite ocean observations into a numerical ocean model led to the most realistic representation of the ocean conditions. They also suggest that, when using the Cooper‐Haines (1996) method to assimilate altimetry observations, assimilating temperature observations is necessary to constrain the model upper ocean vertical structure. We also performed coupled hurricane‐ocean simulations to assess the impact of ocean initial conditions on forecasting Michael. These simulations demonstrate that the ocean conditions, in particular the high sea surface temperatures north of 24°N, played a crucial role in the intensification of Michael. Coupled simulations initialized with the most realistic ocean conditions, constrained by field and satellite observations, show a ∼56% error reduction in wind intensity prior to landfall compared to simulations initialized without data assimilation. Plain Language Summary: Hurricane Michael formed on October 7, 2018, in the Northwestern Caribbean Sea, and quickly traveled northward through the Gulf of Mexico, making landfall on the Florida panhandle as a Category 5 hurricane only 3 days later. Michael intensified during most of its lifetime, despite undergoing unfavorable atmospheric conditions. We characterized the key ocean features under Hurricane Michael, which are known for favoring hurricane intensification: High sea surface temperatures and high heat content in the Loop Current and associated eddies, and in brackish surface waters from the Mississippi River plume that prevent mixing with colder waters below, as observed by ocean gliders. We then performed numerical experiments that demonstrate that the integration of satellite and in situ observations into the ocean model led to achieving the most realistic representation of the ocean. Last, we performed coupled hurricane‐ocean simulations that showed that the upper ocean conditions, especially the high sea surface temperatures in the northeastern Gulf, were essential to the intensification of Michael. These sensitivity experiments showed the importance of ocean observations to improve real‐time analyses of ocean conditions, and thus to improve operational models that provide guidance to hurricane forecasters, allowing them to better warn the public. Key Points: Observations reveal ocean features that favored the intensification of Michael: high temperature, high heat content, and barrier layerHurricane‐ocean simulations show that the ocean conditions supported hurricane intensification despite unfavorable atmospheric conditionsThe assimilation of satellite and in situ ocean observations led to 56% error reduction in wind intensity forecast prior to Michael landfall [ABSTRACT FROM AUTHOR]