Abstract: This paper focuses on the intensity attenuation and timing error variation of Loran-C Navigation System (Loran-C) signals during underwater propagation. Firstly, based on the electromagnetic properties of seawater, an underwater propagation attenuation model is established, and the attenuation constant and attenuation per meter are derived, and the variation pattern of signal field strength with water depth is analyzed. Secondly, starting from the seawater dispersion effect, a theoretical formula of envelope-to-cycle difference (ECD) increasing with water depth is derived, the concept of additional secondary factor (ASF) is introduced, and a comprehensive timing error model is established. Finally, an underwater timing reception experiment scheme is designed, and field tests are carried out in Weihai and Shangchuan Island waters. The measured results show that the signal field strength attenuation in Weihai waters is about 9.98 dB/m, and the timing error increases linearly with water depth at a slope of about 1.86 µs/m, while the timing error slope in Shangchuan Island waters is 1.49 µs/m. By establishing an underwater ASF database, the timing error within 4 m water depth is expected to be reduced from 7–8 µs to better than 1 µs. This paper provides theoretical basis and measured data support for the evaluation and deployment of underwater timing capability of the Loran-C system.