The communication range of magnetic-induction (MI) technology in extreme environments such as underwater or underground is limited by the dipole-like attenuation behavior of the magnetic field as well as the eddy current induced loss in conductive media, and therefore a highly sensitive receiver is generally required. In this work, we propose the use of a highly sensitive superconducting quantum interference device (SQUID) in MI communication and try to provide a comprehensive investigation on developing a SQUID-based receiver for practical MI applications. A portable receiver scheme integrating a SQUID sensor and a coil-based flux transformer was proposed. The high sensitivity and long-range communication capability of the proposed receiver was experimentally demonstrated by spectroscopic measurements and reception experiments on a receiver prototype. Based on the experimental demonstrations, the sensitivity optimization of the proposed scheme was further investigated by simulation studies, which suggest that a communication distance exceeding 100 m and a channel capacity of∼20kb/s in underwater environment could be achieved based upon the optimization of the developed prototype. The results presented in this work have highlighted the potential of deploying SQUID sensors for long-range MI applications in extreme environments.