A numerical model and transmission characteristic analysis of DPSK (differential phase shift keying) pressure signals in mud channels is introduced. With the control logic analysis of the rotary valve mud telemetry, a logical control signal is built from a Gate function sequence according to the binary symbols of transmitted data and a phase-shift function is obtained by integrating the logical control signal. A mathematical model of the DPSK pressure signal is built based on principles of communications by modulating carrier phase with the phase-shift function and a numerical simulation of the pressure wave is implemented with the mathematical model by MATLAB programming. Considering drillpipe pressure and drilling fluid temperature profile along drillpipes, the drillpipe of a vertical well is divided into a number of sections. With water-based drilling fluids, the impacts of travel distance, carrier frequency, drillpipe size, and drilling fluids on the signal transmission were studied by signal transmission characteristic analysis for all the sections. Numerical calculation results indicate that the influences of the viscosity of drilling fluids and volume fraction of gas in drilling fluids on the DPSK signal transmission are more notable than the others and the signal will distort in waveform with differential attenuations of the signal frequent component.