Differences in electromagnetic path delay, between direct Global Positioning System (GPS) signals and those reflected from the surface of Crater Lake, have led to lake surface height estimates with 2-cm precision in 1 second. This is the first high-precision altimetric demonstration with GPS from sufficient altitude (≈ 480 m) to probe fundamental experimental errors, which bear on future air-and spaceborne passive GPS altimetry. It also serves as the first demonstration of a new approach to altimetric remote sensing in the coastal region, an area that is poorly measured by conventional radar altimetry. Time-series analyses suggest that tropospheric and thermal noise fluctuations dominate the altimetric error in this experiment. Estimating the differential delay from several simultaneously visible satellites may enable tropospheric error estimation and correction. Thermal noise on the reflected signal will be reduced with fully polarimetric observations and larger antenna apertures.