This chapter describes the design of a short-range underwater acoustic modem starting with the most critical component from a cost perspective—the transducer. It focuses on modem's analog transceiver consists of a power amplifier, a power management circuit, an impedance matching circuit, and a preamplifier. The chapter describes the design and initial testing of a functional low-cost underwater acoustic modem prototype for short-range underwater sensor networks. It discusses the design of a low-cost transducer used as the basis for the design of our low-cost underwater acoustic modem. The chapter describes the procedures used to determine the electromechanical properties of the homemade transducer. It focuses on design of our low-cost transducer, its ceramic type and geometry, its potting compound and procedure, and its electromechanical properties. The chapter describes the modem's analog transceiver, which was designed to operate in the transducer's operating frequency range.