Abstract Traditional nadir altimeters struggle with coastal water surface elevation (WSE) measurement and fine‐scale river‐estuary interactions, due to land‐water signal interference and their wide inter‐track spacing. The wide‐swath Surface Water and Ocean Topography (SWOT) mission, using a new Ka‐band radar interferometer, aims to address these issues by delivering 2D WSE measurements with unprecedented spatial resolution, accuracy, and precision. However, the mission’s effectiveness in coastal WSE retrieval and its error characteristics remain unverified. This study leverages gauge and airborne LiDAR data to validate SWOT’s WSE in the Bristol Channel and Severn Estuary. Assuming error‐free in situ data, SWOT ocean products exhibit a standard deviation of difference (STD) of 13 cm within a 3 km radius of tide gauges. Compared to LiDAR, SWOT’s PIXC measurements have STD of 37 cm, improving to 14 cm over 100 m grids and 9 cm over 1 km2 areas. This meets the SWOT science requirement of 10 cm STD at 1 km2 scale and extends satellite‐based WSE monitoring into complex coastal environments.