This paper presents the recent progress of implementing an underwater acoustic communication system at NCKU, Taiwan. This system is realized by integrating the PC-based instrumentation, which includes a system controller, an arbitrary waveform generator, a power amplifier, and an acoustic projector (hydrophone). We have developed a command software interface using less than 5kHz bandwidth and acting as a modulator. The real time communication data in symbols can be transmitted through the water channel with the software modulator. Signal acquisition is performed at the receiver end by a hydrophone, a signal amp, the AD/DA converter, and a embedded PC. The communication signal is synchronized and demodulated using FFT analysis. The entire system is compact in size and robust in hardware, and can also be easily transformed into a digital underwater acoustic data acquisition unit for various application purposes, such as academic demonstration and fundamental research.