ABSTRACT:A Digital Transponder collects signals in the range of uplink frequencies and transmits them on a different set of downlink frequencies to receivers on Earth. The Transponder consists of RF Receiver; RF Transmitter & digital Baseband Subsystem. In the Digital Baseband Subsystem, the Receiver performs the demodulation of the uplinked command signal down to the data level. The Transmitter linearly phase modulates the Telemetry video signal on a Baseband Transmitter and generates the required RF power before transmission. In this paper, BPSK modulator and demodulator are designed by using VHSIC Hardware Description Language (VHDL) and implemented in Spartan 3E FPGA kit. The Digital Baseband subsystem is used in Spacecraft applications.