The first European Remote Sensing satellite ERS-1 has two imaging modes, the conventional Synthetic Aperture Radar (SAR) mode and the wave mode. Two quantization schemes, 2-bit and 4-bit, have been proposed for the analogue-to-digital conversion of the video signal of the ERS-1 wave mode. This paper analyzes the influence of these two quantization schemes on ocean-wave spectra. The SAR-images were obtained through simulation using a static oceanwave radar model and a comprehensive software SAR-system simulation model (SARSIM) on the DFVLR computing system. The results indicate that spectra produced by the 4-bit quantization are not significantly degraded from the optimum, but that the 2-bit quantization requires some gain adjustment for optimal spectral reproduction. The conclusions are supported by images and spectral plots covering the various options simulated.