Variational method is capable of dealing with observations that have a complicated nonlinear relation with model variables representative of the atmospheric state, and so make it possible to directly assimilate such measured variables as satellite radiance, which have a nonlinear relation with the model variables. Assimilation of any type of observations requires a corresponding observation operator, which establishes a specific mapping from the space of the model state to the space of observation. This paper presents in detail how the direct assimilation of real satellite radiance data is implemented in the GRAPES-3DVar analysis system. It focuses on all the components of the observation operator for direct assimilation of real satellite radiance data, including a spatial interpolation operator that transforms variables from model grid points to observation locations, a physical transformation from model variables to observed elements with different choices of model variables, and a data quality control. Assimilation experiments, using satellite radiances such as NOAA17 AMSU-A and AMSU-B (Advanced Microwave Sounding Unit), are carried out with two different schemes. The results from these experiments can be physically understood and clearly reflect a rational effect of direct assimilation of satellite radiance data in GRAPES-3DVar analysis system.