Compared to conventional data, radar observations have an advantage of high spatial and temporal resolutions, and Doppler radars are capable of capturing detailed characteristics of flow fields, including typhoon circulation. In this study, the possible improvement of short-term typhoon predictions near Taiwan, particularly with regard to related rainfall forecasts over the mountainous island, using Doppler radial wind observations is explored. The case of Typhoon Acre (2004) was chosen for study, and a series of experiments were carried out using the Penn State University/National Center for Atmospheric Research (PSU/NCAR) Mesoscale Model Version 5 (MM5) with its three-dimensional variational (3D-VAR) data assimilation system. The results show that once the Doppler radial velocities were assimilated into the model, the typhoon's circulation intensified within one hour. However, when Typhoon Acre approached from the east and only the western half of its core area could be observed by the radar, the assimilation caused the typhoon to deflect southward due to the incomplete and uneven data coverage. In another experiment in which Doppler radar data assimilation did not start until Typhoon Acre moved closer, such that its entire core region could be observed. A similar track deflection was avoided. Overall, the assimilation of Doppler radial velocity data reduced the intensity error (in wind speed) by about 25%. Furthermore, the improvements in location, intensity, and circulation structure of Typhoon Acre lead to better rainfall prediction over the island of Taiwan.