Light detection and ranging (LIDAR) is currently used for bathymetric measurement or underwater target detection. A new underwater-target detection scheme named modulated lidar was recently proposed. The study reported here deals with optimization of the modulation process to be applied under such detection conditions. A theoretical model was extracted from available experimental results by deconvolution and further used to simulate realistic backscattered signals for the development of a new modulation scheme. Then, an optimum set of amplitude modulation code parameters was obtained by maximizing the target signal-to-noise ratio. This paper will highlight some particularly promising waveform configurations.