Abstract: During the drilling of horizontal intersection wells for developping coalbed methane,the relative distance and direction between two wells should be measured in real time and accurately to ensure the horizontal well trajectory being intersected with the cave wells,and provide precise geosteering information for the driller.By studying the relationship of signal strength of rotating magnetic field and relative position,a rotating magnetic directional range finding method is proposed according to the model of orthogonal magnetic dipole,and a directional range finding device prototype is developed.It has been tested on surface and at wellsite.This prototype includes near bit permanent magnet sub,downhole data acquisition system and surface interpreting computer.The surface testing device includes a permanent magnet sub bench that can adjust rotating speed,an attitude adjustable bench to fix the data acquisition system,50 m×30 m testing site with orthogonal track.The ground test result shows that the positioning error is less than 0.1 m within a distance of 30 meters.The downhole data acquisition system can receive effective signals when the bit is 80 meters far from the cave well,and the mean direction error is less than 1.5°,it can direct horizontal intersection well drilling.The testing result proves that the distance and direction measurement technique is feasible by coupling the bit and target point of cave well into a closed-loop system with rotating magnetic field.