Brain-computer interface (BCI) is a novel way for interaction between human and machine, which enables direct communication between the people′s mind and the computer. BCI system and its signal processing method are proposed based on pseudo random sequence modulated color visual stimulation and the chromatic transient visual evoke potential (CTVEP). According to the properties of human visual system, it has been demonstrated that chromatic visual stimulation is safer and more comfortable for various subjects. In the proposed BCI system, a number of spatially separated chromatic con-central rings will be simultaneously presented on and off, with on/off pattern each specified by a distinct sequence form 36 pseudo random Gold sequences. For the received data from occipital region, we have proposed a demodulation method based on the orthogonality among Gold sequences, and the subject focusing pattern is ultimately determined by using matched filtering. After experiments on 20 subjects, the identification accuracy of the proposed system was achieved, which has verified the validity of the system in translating the ideas of the subjects.