Instant messaging system is considered to be one of the widely used application area, it is rapidly growing as a primary communications technology among corporate, educational and home users. Users of instant messaging systems need to authenticate each other before communicating, so the need for login authentication becomes an important issue. This research deals with the design and implementation of instant messaging system (IMS) supported with a suggested method to authenticate users. The suggested method combines two different authentication mechanisms: Fixed Password and Digital Signature, where the authentication process passes through multi levels of security checks. The proposed instant messaging system provides the users with some features like text chatting in public and private chat area, sending offline messages using private chat area, and changing the current password in the case of its steeling or forgetting. IMS uses TCP/IP protocol for all communications between hosts. All connections between server and clients are based on client/server networking model, while connections between clients is based on peer-to-peer networking model. The proposed system has been evaluated from three points of views, which are: easy of use, fast execution and security, where the system provides the users with a common easy way for chatting in virtual real time. The security level provided for users of IMS is quite suitable for this kind of applications. IMS was implemented using Microsoft Visual Basic 6.0 programming language and tested on PCs connected to a LAN network at which all computers are running under Window XP operating system.