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The inertia of wave measurement buoys impresses transfer functions on the wave measurement data (i.e. heave, wave slopes with respect to the horizontal axes). This effect causes difference or error between the measured and actual wave data. Calculation or estimation of the buoy transfer functions and affecting the inverse of them, makes it is possible to achieve more accurate wave data. In this paper, an algorithm for estimation of the buoy transfer functions using in-situ wave data is introduced and the simulation results are presented. The effect of the buoy transfer functions on the spectral parameters is also investigated. This algorithm uses the intrinsic properties of the sea waves.