Due to the absorption and scattering effects of light in water, propagation characteristics of lasers underwater become complicated. In particular, the backscatter causes the target contrast to decrease, which makes the use of lasers in underwater detection face a great challenge. Carrier modulation technique can be used to suppress the backscatter for underwater lidar. Computer simulation based on Monte Carlo method is used to establish an underwater detection model for photons of Gaussian pulse lasers modulated by cosine signal. The effects of parameters such as pulse width, modulation frequency, and modulation depth on detection results are discussed. The results show that, compared with traditional pulse lidar simulation results, carrier modulation technique with correlation detection can effectively improve the underwater target contrast. The pulse width has the optimum range. The modulation frequency has effect on the signal-to-noise ratio and ranging accuracy of the target echo signal. The greater the modulation depth, the higher the signal-to-noise ratio of the target echo signal.