This article proposes a binary phase shift keying (BPSK) based magneto-inductive communication system. Firstly, the hardware and software design of this MI system is described in details. By using this communication device, a series of underground communication experiments were conducted in Loess Plateau, where the soil is mainly composed of clay. Our result indicates that, the simulation and experimental bit error rates are roughly consistent, and the actual maximum distance is close to the simulated result, which verifies the correctness of our system. Basing on this, methods of improving the BER are discussed, and the conclusion reveals that, a trade-off must be made between communication distance and bandwidth. Moreover, a much longer distance can be achieved by improving the quality factor of the transmitting circuit.