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A previous study proposed an adaptive observation error inflation (AOEI) method for an ensemble Kalman filter (EnKF)-based atmospheric data assimilation system to assimilate all-sky infrared brightness temperatures. Brightness temperature differences between clear- and cloudy-sky radiances are large, and observation-minus-forecast differences (or innovations) are therefore likely to be large around boundaries between clear- and cloudy-sky regions. The AOEI method mitigates these discrepancies by adaptively inflating observation errors. Ocean frontal regions have similar characteristics to the borders between clear- and cloudy-sky regions with large innovations. Consequently, we have implemented the AOEI with an EnKF-based regional ocean data assimilation system, in which the assimilation interval is set to 1 d to utilize frequent satellite observations. We conducted sensitivity experiments to investigate the impacts of the AOEI on salinity structure, geostrophic balance, and accuracy. A control run, in which the AOEI is not applied, shows the degradation of low-salinity North Pacific Intermediate Water around the Kuroshio Extension region, where the innovation amplitude and forecast ensemble spread are large in association with the fronts and eddies. The resulting large temperature and salinity increments weaken the density stratification, leading to large vertical diffusivity. As a result, the low-salinity water in the intermediate layer is lost through strong vertical diffusion. When the AOEI is used, the salinity structure in the ocean interior is preserved because the AOEI suppresses the salinity degradation by reducing the temperature and salinity increments. We also demonstrate that the AOEI provides significant improvement of the geostrophic balance and the analysis accuracy of temperature, salinity, and surface-flow fields. [ABSTRACT FROM AUTHOR]