In this article, a high-performance water-coupled ultrasonic ranging technique is presented. We improved the conventional time-of-flight (ToF) ranging technique based on digital correlation of pseudorandom noise (PRN) waveforms by introducing signal carrier phase shift detection with an I/Q coherent reception method. In this way, the spatial resolution is dominated mainly by the digitization resolution of the analog-to-digital converter (ADC) used in the receiver circuit. Submicrometer resolution is achieved in the entire full-scale-range (FSR) while keeping the ADC sampling rate at the Nyquist sampling limit of the carrier frequency of ranging signal. In this study, we use quadrature amplitude modulation (QAM) waveforms of a set of 1023-bit GPS Gold codes with 8 MHz carrier as a ranging signal. Experiments carried out in a water vessel reveal micrometer-level accuracy and precision for quasi-static and dynamic cases. It is experimentally illustrated that the proposed method is capable of multiplexing. The optimal ranging performance is approached by selecting an appropriate set of systemic technical parameters and ranging signals. This allows to define the figure of merit (FOM) indicating the performance upper bound of such a ranging system.