Abstract: Surface acoustic wave ( SAW) is an acoustic wave traveling along the surface of a material exhibiting elasticity，with most energy concentrated nearby the surface． SAW-based radio frequency identification( RFID) technology is a new achievement involving the modern electronics，acoustics，microelectronic process technology and radar signal processing technology，etc． It is characterized by full passivity，wide-reading range，low cost and can operate under harsh environments，such as high temperature difference，strong electromagnetic interference，etc． It can be used in transport and communications，industrial and agricultural manufacturing and monitoring，etc．As an important complement to the RFID based on integrated circuit chip，it gradually receives increasing attention． In this paper characteristics and advantages of SAW-RFID are introduced based on its operation principle，the encoding modes，development situation and the key technological problems of SAW tags are analyzed and discussed．