Taps on a beam-interrupt button of an underwater signaling transceiver are encoded as binary frequency shift-key modulated Golay codes, which are transmitted via 56-58 kHz compression waves generated by a ring-shaped electromechanical transducer. Light emitting diodes flash to signal the content of received signals and provide monitoring of the distance between divers. All components of the transceiver—except outer portions of input/output leads and a suction cup for attaching to the transceiver to a diver's mask—are completely encased in transparent plastic. The input/output leads allow an internal battery to be recharged, provide access to the internal processor for programming and data retrieval, and monitor whether the transceiver is submerged so that the transceiver can operate in an underwater mode or an above-water mode. Transceivers only communicate with other transceivers which use the same communication channel. Transceivers monitor their separation distances and flash a warning signal when nearing an out-of-range condition.