This work introduces a nonlinear and data-dependant method for extracting the significant wave height from a sequence of X-band radar images, which is based on the Teager-Huang Transform (THH). The THH comprises two parts, which are empirical mode decomposition (EMD) and application of the Teager-Kaiser energy operator (TKEO). EMD is applied to decompose the images into various decompositions, which are narrow-banded and have mono-components; TKEO separates the aforementioned narrow-banded components into their amplitude and frequency. The standard deviation of the separated amplitude is related to Hs, and, the relation is obtained by calibrating radar data with in situ data (buoy). The separated frequencies reveal the orientation and intensity of data, which are directly related to the direction of the waves. For validation, the method was applied to sequences of radar images that were obtained from the west coast of Taiwan. The results obtained using the method indicate that THH can be used specifically to estimate Hs with a root mean square error (RMSE) of 0.34 m. Furthermore, the developed method can efficiently measure the direction of waves at each specific point in an image.