It has been found that the traditionally used electromagnetic wave instruments have limitations in detection depths, as well as a lack of directionality. Therefore, those types of instruments cannot meet the needs of geo-steering applications. However, azimuth electromagnetic wave instruments have shown the ability to quickly acquire effective geo-steering information using a tilt coil design method, which can potentially provide accurate guidance for decision-making in drilling direction adjustments. In this study, a design method for an azimuth electromagnetic wave detection instrument for underground coal mining was proposed. The relationships between the structural parameters of the instrument and installation angles of the coils and the response signals were obtained in this study using simulations. Then, by choosing reasonable instrument spacings, coil installation angles, and transmitting frequencies, the detection performances of the instrument were successfully improved. Also, the basic parameter selections of the proposed logging-while-drilling azimuth electromagnetic wave logging instrument were determined to be suitable for underground coal-mining purposes. It was also found that the symmetric compensation of the instrument was sensitive to the interface responses, and the anti-symmetric compensation was sensitive to the anisotropic responses. In addition, a method of detecting the interface positions and azimuth of coal-seam interfaces using azimuth electromagnetic waves, as well as the potential for the application of the instrument for the detection of low-resistivity anomalies in coal goafs, were effectively demonstrated. The results of this study provided theoretical references for future coal-seam boundary detections and explorations, and also added insight into the development processes of coal-seam bedding.