The aim of our work is to improve the modulation transfer function (MTF) of velocity bunching by the quad-polarized GF-3 synthetic aperture radar (SAR). In total, more than 10,000 Gaofen-3 (GF-3) images acquired in wave mode (WV) in quad-polarization are collocated with ocean waves simulated from WAVEWATCH-III (WW3) model and ocean currents from the HYbrid Coordinate Ocean Model (HYCOM). The validation of WW3-simulated significant wave height (SWH) against the measurements from National Data Buoy Center (NDBC) of National Oceanic and Atmospheric Administration (NOAA) yields a 0.48 m root-mean-square error (RMSE) of SWH with a 0.88 correlation coefficient (r). The winds are inverted using the geophysical model function (GMF), denoted as CSARMOD-GF, which is specially for the re-calibrated GF-3 SAR in vertical-vertical (VV) polarization. The azimuthal cut-off wavelength λc caused by velocity bunching is theoretically calculated by wave spectrum from WW3 model and practically estimated from SAR intensity image, respectively. It is found that the velocity bunching is independent with polarization; however, the bias (theoretic minus SAR-derived λc) increases with sea state growing and has no obvious relationship with current. Following this rationale, the MTF of velocity bunching is empirically constructed by including the term of wind speed and the analysis shows a 3.76 m RMSE with a 0.92 r through comparing the SAR-derived λc in VV polarization and simulated values. Under this circumstance, the accuracy of wave retrieval is anticipated to be improved when using the proposed MTF of velocity bunching. [ABSTRACT FROM AUTHOR]