In this paper, a high-resolution Sentinel-3 synthetic aperture radar altimeter is used to observe ISWs in the Sulu Sea. Based on the advantages of the simultaneous observation of Sentinel-3 OLCI and SRAL, the changes in ${\sigma }_0$, SWH, and SSHA caused by the ISWs are quantitatively analyzed. The results show that ${\sigma }_0$ decreases and then increases after being modulated by the ISWs in the altimeter operation direction; SWH shows a large change; and the change trend of SSHA is the same as that of ${\sigma }_0$. Because of the angle between the propagation direction of the ISWs and the SRAL trajectory, the actual position corresponding to the peak power in the waveform detects the ISWs before the nadir, at which time ${\sigma }_0$ is already modulated by ISWs, resulting in the deviation of ${\sigma }_0$. In addition, the sea surface roughness within the SRAL footprint in this case is no longer uniform, which violates the assumption of retracking and leads to the incorrect estimation of geophysical parameters such as SWH and SSHA. With a view to correcting these errors, the effect of ISWs on the retracker must therefore be considered and the model for waveform modified accordingly.