A methodology for the design of small autonomous underwater vehicle propulsion systems has been developed and applied to the Virginia Tech 690 AUV. The methodology is novel in that it incorporates fast design level codes capable of predicting the viscous effects of low Reynolds number flow that is experienced by small, slow turning propellers. The methodology consists of determining the minimum induced loss lift distribution for the propeller via lifting line theory, efficient airfoil sections for the propeller via a coupled viscous-inviscid flow solver and optimization, brushless DC motor identification via ideal motor theory and total system efficiency estimates. The coupled viscous-inviscid flow solver showed low Reynolds number flow effects to be of critical importance in the propeller design. The original Virginia Tech 690 AUV propulsion system was analyzed yielding an experimental efficiency of 26.5%. A new propeller was designed based on low Reynolds number airfoil section data yielding an experimental efficiency of 42.7%. Finally, an entirely new propulsion system was designed using the methodology developed herein yielding a predicted efficiency of 57-60%.