The model's physical equation is used to parameterize some subgrid-scale processes and physical processes in the present numerical model.The transmission and attenuation of the solar energy in the ocean are considered.A simple diagnostic equation for the cloud fractions k proposed on the basis of the humidities at the surface and the mid-troposphere.The parameterized formulae of both entrainment and Ekman pumping are improved. In the numerical integration,the treatment on damping the inertial oscillations is emphasized.The initialization and the objective analysis of the data which are necessary for the operational prediction will be presented in another paper. Results of SST prediction and some numerical experiments are given here.The model is computationally stable and successful in modelling the behaviors of the drift current and the mixed layer physics,and the AMD (absolute mean deviations) ≤ 1.2℃,RC (correlation coefficients) ≥ 85% for 3-day forecasting.