In a DS-SS system, each user is assigned a unique code sequence (PN-Sequence) that allows the user to spread the information signal across the assigned frequency band. Signals from the various users are separated at the receiver by cross correlation of the received signal with each of the possible user code sequences. Possible narrow band interference is also suppressed in this process. Because of its advantages, it is used in CDMA systems to assign a unique code to every user. This paper describes the design of CDMA modem in FPGA based on DSSS. 8051 microcontroller & FPGA were linked with rf transmitter/receiver, a acknowledgement was being sent to FPGA once the bit was transmitted/receive by the 8051 microcontroller. At the receiver output of 8051 microcontroller was compared with the threshold levels using a comparator and this provides binary output which is the actually transmitted sequence.