Abstract Digital communication using MIMO has been one of the most promising research areas in wireless communications nowadays as it offers a lot of promises for future wireless communications .MIMO seems to be the only technology that is advancing the wireless industry from 3Gto 4G systems .I n this work MIMO system has been studied in great detail and simulated for different cases and it was concentrated on the performance of its capacity under several environmental conditions . MIMO system offer significant gains in performance over traditional wireless communication systems . Spatial multiplexing increases system throughput without consuming frequency spectrum and spatial diversity make the link more robust .MIMO system was described was described and simulation results were presented and discussed. Multiple antenna techniques are a key to boosting the performance of modern wireless systems. Key words: MIMO, spatial multiplexing, capacity, diversity,SNR