Underwater wireless communication is a flourishing research area in the field of wireless communications. This paper presents the overall framework of the necessity of underwater wireless systems, characteristics of an acoustic channel, hardware and working of acoustic modems, sensor networks and different communication architectures involved in the sensor networks. Applications till date, like oceanographic data collection,AUVs(autonomous underwater vehicles),underwater radio etc.., future challenges like effective transmission of video and audio signals by real time monitoring have been emphasized with a view to overcome the present limitations.