Abstract: According to the theory of orthogonal multiplex, frequency division multiplex （FDM） and time division multiplex （TDM） belong to orthogonal multiplex. FDM and TDM are not the only two multiplex methods which satisfy the orthogonal condition. Walsh functions are orthogonal and complete. As a telemetry system based on Walsh functions, sequency division multiplex （SDM） is theoretically proposed, and its feasibility is verified experimentally. The design concept, block diagram, operational principle and technical realization are discussed in detail. The laboratory prototype is a WAM-FM system. In order to show the advantage and potentiality, it is compared with FDM. As a. result, the new system is not only of academic value, but also of practical importance.A SDM system using Walsh sub-carriers was developed for transmission of telemetry signals. Crosstalk caused by synchronization errors and by distortions of the subcarriers is investigated. Consequently, rules for selection of the subcarriers are derived to minimize errors caused by poor synchronization. Errors due to distortions of the subcarriers are only of secondary importance in comparison with the errors caused by poor synchronization.