Autonomous Underwater Vehicles (AUVs) have been established as a viable tool for Oceanographic Sciences. Being untethered and independent, AUVs fill the gap in Ocean Exploration left by the existing manned submersible and remotely operated vehicles (ROV) technology. AUVs are attractive as cheaper and efficient alternatives to the older technologies and are breaking new ground in many applications. Designing an autonomous vehicle to work in the harsh environment of the deep ocean comes with its set of challenges. This paper discusses how the current engineering technologies can be adapted to the design of AUVs.Recently, as the AUV technology has matured, we see AUVs being used in a variety of applications ranging from sub-surface sensing to sea-floor mapping. The design of the AUV, with its tight constraints, is very sensitive to the target application. Keeping this in mind, the goal of this thesis is to understand how some of the major issues affect the design of the AUV. This paper also addresses the mechanical and materials issues, power system design, computer architecture, navigation and communication systems, sensor considerations and long term docking aspects that affect AUV design.With time, as the engineering sciences progress, the AUV design will have to change in order to optimize its performance. Thus, the fundamental issues discussed in this paper can assist in meeting the challenge of maintaining AUV design on par with modern technology.