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Transient electromagnetic (TEM) method using high temperature SQUID (HTS SQUID) for geophysical exploration has been developed. In terms of high sensitivity, wide bandwidth and its easy handling, HTS SQUIDs are anticipated for use with the coolant of the liquid nitrogen. The development was focused on high magnetic field sensitivity and high slew rate for better resolution and deeper depth of exploration. A highly sensitive large direct couple SQUID is made with step-edge junctions on a 20 mm by 20 mm substrate. The effective area is 0.52 mm2 and the typical magnetic field noise is 50-100 fT/Hz12/. The flux locked loop circuit is a direct-readout type for the purpose of high frequency response up to 100 kHz and has low amplifier noise of 0.5 nV/Hz12/. The system achieved noise level of 200 fT/Hz12/ under the magnetic field environment and the slew rate of 7.3 mT/sec. We conducted field trials at several sites in Japan with the successful operation of the system. It was confirmed that the system has up to two orders improved sensitivity than the conventional system which enables the exploration of deeper regions. The reconstructed resistivity profile by 1-D inversion of the SQUID data agrees well with the results of the drilling survey.