The ocean covers 71% of the Earth's surface. At present, only about 20% of the seafloor topography (ST) has been directly measured by ships, and most areas are predicted from satellite altimetry‐derived gravity products. In this study, an adaptive nonlinear iterative (ANI) method is proposed to address two major problems in gravity ST inversion: linear approximation and empirical seafloor density contrast (SDC). In ANI, the SDC is adaptively estimated as an output, while higher‐order Parker expansion and modified Bott's iteration are combined to recover nonlinear topography. We apply our new method using the DTU21GRA altimetric gravity model and single‐beam bathymetry to predict the ST in a part of the South China Sea. Results reveal that the average SDC in the study area is 1.24 g/cm3, which compares well to CRUST1.0. The root‐mean‐square (RMS) error between the nonlinear model and single‐beam checkpoints is 102.1 m, which is improved by 34.5%, 29.2%, and 18.3% compared with the non‐gravity model, topo_24.1, and linear model, respectively. The RMS error between the nonlinear model and multibeam bathymetry is 91.0 m, which is better than the linear model. Analysis of two‐dimensional profiles shows that the nonlinear model reveals more terrain details than the linear model.