Multiple-input-multiple-output (MIMO) wireless systems employ multiple transmitter and receiver antennas, and offer a manifold increase in system capacity and improvement in signal quality, as compared to conventional wireless systems being used at present. MIMO uses spatial multiplexing and exploits multipath propagation to its benefit for increasing system capacity as opposed to conventional wireless systems, while the spatial diversity at the transmitter as well as the receiver ensures better signal quality in terms of the bit-error rate (BER). This thesis is concerned with the modeling and analysis of a MIMO wireless system using the air acoustic transmission channel. Various performance measures have been carried out on this system in real-time and the results analyzed. The system has been modeled for a stationary indoor environment and demonstrates the application of MIMO principles for data rate maximization. The designed system is a 2 x 2 MIMO digital transmission system which simultaneously transmits two independent BPSK modulated bit streams. This system makes use of a Singular Value Decomposition (SVD) based MIMO equalization scheme which requires the channel state information (CSI) to be known at the transmitter. Therefore, MIMO channel estimation is also part of the implementation. The acoustic transmission channel varies considerably from the radio channel. It uses a low carrier frequency and supports very low data rates. In addition, the multipath delay spread may be significantly larger due to slow propagation speed of acoustic waves over large distances. It is comparatively more difficult to model the acoustic channel and multiple filter taps are required for better channel estimation. However, the MIMO principles are equally valid for the acoustic channel as indicated by the results presented in this thesis.