The traditional underwater Alternating current filed measurement does not take into account the influence of shell material on the detection signal and each parameter of the equipment in the simulation design. In order to solve this problem, an ACFM simulation model was established, the size and shape of the magnetic core were optimized and the probe size was reduced. The effects of the conductivity and permeability of the NDT probe housing material on the detection signal were simulated and analyzed. The most suitable shell material for deep water NDT is 304 stainless steel and the best current frequency, and the parameters of the NDT probe are optimized. The results show that when the conductivity of the shell material reaches 107 S?m-1, the characteristic signal detected by the magnetic sensor will reverse and the frequency of the current more than 7 kHz will lead to serious distortion of the detection signal.The permeability of shell material attenuates seriously to the amplitude of Bz and Bx.The research results of this paper are beneficial to the development and design of NDT.