The topographic and atmospheric masses influence the satellite gravity gradiometry data, and it is necessary to remove these effects as precise as possible to make the computational space harmonic and simplify the downward continuation of such data. The topographic effects have been formulated based on constant density assumption for the topographic masses. However in this paper we formulate and study the effect of lateral density variation of crustal and topographic masses on the satellite gravity gradiometry data. Numerical studies over Fennoscandia and Iran show that the lateral density variation effect of the crust on GOCE data can reach to 1.5 E in Fennoscandia and 1 E in Iran. The maximum effect of lateral density variation of topography is 0.1 E and 0.05 E in Iran and Fennoscandia, respectively.