This paper presents some novel methods to estimate a vessel’s number of shafts, course, speed and classify it using the underwater acoustic noise it generates. A classification framework as well as a set of reference parameters for comparison are put forth. Identifying marine traffic in surroundings is an important task for vessels in an open sea. Vessels in vicinity can be identified using their signatures. One of the typical signatures emitted by a vessel is its acoustic measurements. The raw sonar data consisting of the acoustic signatures is generally observed manually by sonar operators for suggesting class of query vessel. The valuable information that can be extracted from the recorded acoustic signature includes shaft revolutions per minute (SRPM), number of blades (NOB), number of shafts, course and speed etc. Expert sonar operators use their empirical knowledge to estimate a vessel’s SRPM and NOB. Based on this information vessel classification is performed. Empirical knowledge comes with experience, and the manual process is prone to human error. To make the process systematic, calculation of the parameters of the received acoustic samples can be visually analyzed using Detection of Envelope Modulation on Noise (DEMON) spectra. Reported research mostly focuses on SRPM and NOB. Parameters such as number of shafts and vessel course and speed can effectively aid the vessel classification process. This paper makes three novel contributions in this area. Firstly, some novel DEMON spectra analysis techniques are proposed to estimate a water vessel’s number of shafts, speed, and relative course. Secondly, this paper presents a classification framework that uses the features extracted from DEMON spectra and compares them with a reference set. Thirdly, a novel set of reference parameters are provided that aid classification into categories of large merchant ship type 1, large merchant ship type 2, large merchant ship type 3, medium merchant ship, oiler, car carrier, cruise ship, fishing boat and fishing trawler. The proposed analysis and classification techniques were assessed through trials with 877 real acoustic signatures recorded under varying conditions of ship’s speed and sea state. The classification trials revealed a high accuracy of 94.7%.