In this paper a strengthened acousto-optic (AO) coefficient of piezoelectric crystal is proposed. It shows the influences of AO effect, electro-optic (EO) effect and piezoelectric effect in piezoelectric crystal. Through correcting acoustic momentum mismatch into sum of the acoustic and electric momentum mismatch, the coupled wave equation group of the surface acoustic wave (SAW) AO effect can be changed as that of SAW acousto-electro-optic (AEO) effect. A diffraction efficiency formula of SAW AEO effect is given through solving the equation group. The formula indicates that the diffraction efficiency is related to power of SAW, acoustic frequency deviation and direct current (DC) voltage. We designed and manufactured a SAW AEO device using Lithium Niobate (LN). Some curves of relative diffracted efficiency vs power of electric signals driving the device, acoustic frequency deviation and DC voltage are measured. Experimental results are consistent with theory. SAW AEO device can be used as a deflector or modulator. When it is used as deflector, its bandwidth is wider than that of SAW AO deflector. When it is used as modulator, its center frequency can be changed. SAW AEO device has smaller volume, less energy consume and is easy to integrate. It can be used in optic communication and real time signal processing, for example correlation, convolution, spectrum analysis and optic vector calculation and so on.