Based on the analysis of the-state-of-the-art of pressure compensation of underwater hydraulic systems (UHSs), a new method of pressure compensation of UHSs, whose hydraulic power unit is in the atmospheric circumstance, is proposed. And a pilot-operated relief valve with pressure compensation is realized. The pressure compensation precision is guaranteed by direct detection. Its dynamic performance and stability are improved by a dynamic feedback. Theoretical study, simulation and experiment show that the pilot-operated relief valve with pressure compensation has a fine property of tracking underwater ambient pressure and meet the requirement of underwater ambient pressure compensation.