Generation of chaos from acousto-optic modulators with an electronic feedback has been studied for several years. Such chaotic signals have an important application in providing secure encryption in free-space optical communication systems. Lyapunov exponent is an important parameter for analysis of chaos generated by a nonlinear system. The Lyapunov exponent of an acousto-optic system is determined and calculated in this paper to understand the dependence of the chaotic response on the system parameters such as bias, feedback gain, input intensity and initial condition exciting the cell. Analysis of chaos using Lyapunov exponent is consistent with bifurcation analysis and is useful in encrypting data signals.