Digital Compass is a kind of device which can acquire the carrier’s attitude. This study introduced the principle of an electronic compass. By using magneto resistive sensor chip HMC1022 made by Honeywell，a 2-axis electronic compass was developed. The amplifier AD623 was used as the signal conditioning circuit. The MPU MSP430 was in charge of A/D converting, azimuth computing and digital outputting. And the Set/Reset(S/R) circuit was adopted so that the error due to null and drift could be minimized. Experiment results showed that the system had good ability to acquire the carrier’s attitude with stable operation and low power consumption. The error was below 1°.