Background error covariance () matrix is critical for variational data assimilation as it greatly affects the analyses of three-dimensional variational assimilation. The National Meteorological Center method was used to estimate the matrix using the forecasts from the Advanced Research Weather Research and Forecasting regional model. To further understand and evaluate the newly generated regional matrix, its characteristics were compared with the global estimated from the Global Forecast System model. Sensitivity experiments were undertaken by changing the horizontal length-scales and standard deviations of the matrix, and its impacts on the typhoon forecast were also examined. Verification against radiosonde observations showed that the varying horizontal length-scale has a significant positive impact on the 24-h forecast of temperature, specific humidity, u-wind, and v-wind. On the other hand, changing standard deviations of the matrix has a slight influence only on the specific humidity and wind (u-component) forecast. Compared with the global , the tuned regional showed improvements in temperature forecasts. In addition, using the tuned regional also led to a positive impact on the typhoon (Saola, Damrey, and Haikui) track forecasts as compared with the untuned and global .