Over the past few decades, the scalar component of the acoustic field, i.e., the pressure channel, has been extensively used for underwater acoustic communication. In recent years, vector components of the acoustic field, such as the three components of acoustic particle velocity, are suggested for underwater communication. Consequently, one can use vector sensors for underwater communication. The small size of vector sensor arrays is an advantage, compared to pressure sensor arrays commonly used in underwater acoustic communication. This is because velocity channels can be measured at a single point in space. So, each vector sensor serves as a multichannel device. This is particularly useful for compact underwater platforms, such as autonomous underwater vehicles (AUVs). Funded by the National Science Foundation, our research efforts focus on the research problems in two closely-related categories: channel modeling and transceiver design. Channel modeling research aims at characterization of those aspects of acoustic particle velocity channels such as delay and Doppler spread, transmission loss, etc., which determine the communication system performance. Transceiver design addresses optimal use of vector sensors and particle velocity for data modulation and demodulation, equalization, synchronization, coding, etc. (work supported by NSF).