This thesis focuses on the variable‐length code (VLC) design using the performance of iterative source‐channel decoder (ISCD). Our work starts with a soft‐bit source decoding algorithm based on the bit‐based trellis. According to the source distribution, VLC can exploit the residual redundancy between source‐encoder indexes to enhance the robustness of the ISCD system. Then we analyze the performance of different VLC schemes, in terms of the extrinsic information transfer chart (EXIT chart). To further improve the reliability of ISCD system, we propose a new approach to VLC based on the EXIT chart. Simulation results show that the proposed VLC scheme can improve the error robustness of ISCD system.