In underwater navigation, the conventional Error State Kalman Filter (ESKF) is used for combining navigation data where due to first order linearization of the nonlinear equations of the dynamics and measurements, considerable error is induced in estimated error state and covariance matrices. This paper presents an underwater integrated inertial navigation system using the unscented filter as an improved nonlinear version of the Kalman filter family. The designed system consists of a strap-down inertial navigation system accompanying Doppler velocity log and depth meter. In the proposed approach, to use the nonlinear capabilities of the unscented filtering approach the integrated navigation system is implemented in a direct approach where the nonlinear total state dynamic and and measurement models are utilised without any linearization. To our knowledge, no results have been reported in the literature on the experimental evaluation of the unscented-based integrated navigation system for underwater vehicles. The performance of the designed system is studied using real measurements. The results of the lake test show that the proposed system estimates the vehicle's position more accurately compared with the conventional ESKF structure.