Abstract: The effect of channel parameters such as angle spread, angle of arrival, and array element spacing on the underwater acoustic MIMO capacity is studied with a three-dimensional multipath correlation model using a vertical transmitting and receiving array. In a MIMO system with static transmitting and receiving arrays, regardless of the movement of scatters in the underwater acoustic channel, the capacity is dependent on the spatial correlation among array element signals at the transmitter as well as at the receiver. If correlation between elements of the channel matrix is weak, increasing the number of array elements will greatly increase the MIMO capacity. In a channel of strong correlation, increasing the number of array elements will cause the MIMO capacity to approach saturation.