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There is a growing interest in using underwater networked systems for oceanographic applications. These networks often rely on acoustic communication, which poses a number of challenges for reliable data transmission. The underwater acoustic channel is highly variable; each link can experience vastly different conditions, which change according to environmental factors as well as the locations of the communicating nodes. This makes it difficult to ensure reliable communication. Furthermore, due to the high transmit power, the energy consumed in transmitting data is substantial, which is exacerbated at lower data rates. The main challenge that we address in this article is how to build a system that provides reliable and energy efficient communication in underwater sensor networks. To this end, we propose an adaptive underwater acoustic modem which changes its parameters according to the situation. We present the design of such a modem and provide supporting results from simulations and experiments.