The electromechanical (E/M) impedance method is a powerful technique in active structural health monitoring (SHM). E/M impedance method utilizes as its main apparatus an impedance analyzer that reads the in-situ E/M impedance of piezoelectric wafer active sensors (PWAS) attached to the monitored structure. Present-day impedance analyzer equipments (e.g.HP4194) are bulky, heavy and expensive laboratory equipment that cannot be carried into the field for on-site structural health monitoring. This paper presented the development of a compact and low-cost impedance analyzer system. First, two types of impedance measurement approaches were evaluated in a PC-based simplified impedance analyzer system. It was found that the first approach, which measures impedance frequency by frequency, is very accurate but is not time-efficient and needs more efforts to be implemented. As for the second approach, which measures impedance using broad-band excitation and transfer function method, provides a good compromise among the measurement time-efficient, accuracy and implementation efforts. Experimental results show that this approach can be used for E/M impedance method for structural health monitoring. Second, to eliminate the PC in the measurement system, a DSP-based impedance analyzer system is proposed for further miniaturization. The system hardware configuration and design, software state flow for impedance measurement, and preliminary testing were presented in details.