Abstract: One of the key technologies in the missile IFF (identification friend or foe) system is the encrypting transmission for the questioning and answering signals. To meet the ciphers requirements with larger capacity and stronger randomicity in the system, the M-sequence was introduced and its characteristics were analyzed. With the cut-join sieve method and the microcontroller, a coder was proposed. The principle diagrams and working process were analyzed. The generating flow chart on the intersecting line pairs of each layer was given and the five-level M-sequence circuit unit working process was analyzed. The software and the hardware were debugged. The coder could generate and store all five-level M-sequences. The ciphers capacity is 2048. The ciphers length is 32. The sequence waveforms of the coder and the stored contents in E²PROM(electrically-erasable programmable read-only memory) were given and their characteristics were analyzed. The experimental results show that the method is valid and the designed coder can work well.