Sensor development and signal processing are two key issues in structural health monitoring (SHM). A process of PVDF annular array sensor design via guided ultrasonic wave propagation, excitation, and wave damage interaction modeling is presented in this paper. A sample problem to monitor the occurrence and progression of simulated corrosion damage in an aluminum plate is studied. An effective guided wave mode for easy corrosion depth assessment was selected based on guided wave propagation analysis. Three dimensional finite element method (FEM) analyses were performed to study the wave field excited from PVDF annular arrays and sectioned annular arrays in the aluminum plate. Annular arrays with enhanced mode selection capabilities were permanently bonded to a 1mm aluminum plate. Simulated corrosion damage with progressive corrosion depths was successfully detected in the structure using wave mode based signal analysis and feature extraction. The relation between the damage depth and the reflection wave amplitude from the signal were studied with both numerical simulation and experiments.