A methodology is described for assimilating observations in a steady state two-dimensional horizontal (2-DH) model of nearshore hydrodynamics (waves and currents), using an ensemble-based statistical estimator. In this application, we treat bathymetry as a model parameter, which is subject to a specified prior uncertainty. The statistical estimator uses state augmentation to produce posterior (inverse, updated) estimates of bathymetry, wave height, and currents, as well as their posterior uncertainties. A case study is presented, using data from a 2-D array of in situ sensors on a natural beach (Duck, NC). The prior bathymetry is obtained by interpolation from recent bathymetric surveys; however, the resulting prior circulation is not in agreement with measurements. After assimilating data (significant wave height and alongshore current), the accuracy of modeled fields is improved, and this is quantified by comparing with observations (both assimilated and unassimilated). Hence, for the present data, 2-DH bathymetric uncertainty is an important source of error in the model and can be quantified and corrected using data assimilation. Here the bathymetric uncertainty is ascribed to inadequate temporal sampling; bathymetric surveys were conducted on a daily basis, but bathymetric change occurred on hourly timescales during storms, such that hydrodynamic model skill was significantly degraded. Further tests are performed to analyze the model sensitivities used in the assimilation and to determine the influence of different observation types and sampling schemes.