A new formula for the pulse-compression ratio achievable with linear FM pulses (chirp signals) in ultrasonic applications is derived. The calculations take into account the frequently omitted effects of the transfer function of an ultrasonic transducer. For a squared-cosine type transducer spectrum, the optimum chirp signal bandwidth is 1.14 times the 6 dB bandwidth of the transducer. The pulse-compression ratio is 2.24 dB lower than in the case of an ideal broadband transducer. Measurements show a close agreement with the presented theory.