Lookout Bluff forms the northern arm of Waterfall Bay, and the reef beneath it is a shallow, intricate dive in 5-9 m. The Marine Life Network site guide identifies two features: The Split, a narrow crevice where the rock has cracked along a joint, and Crossroads, a small cave where several short passages meet. Both are best explored slowly, since the walls of the fissures carry encrusting sponges, jewel anemones and small invertebrates that thrive in the shade, and rock lobsters wedge themselves into the deeper cracks.

Around the bluff the reef is typical Tasman Peninsula dolerite covered in brown algae and kelp, with scattered boulders and sand patches. Wrasse, leatherjackets, magpie morwong and bastard trumpeter are common, and weedy seadragons turn up along the kelp edge. Because it is shallow, the site offers long bottom times and plenty of light, which makes it a good training site and a comfortable dive for newly certified divers who want a taste of Waterfall Bay's topography without depth or overhead passages.

Photographers can spend a whole dive on the anemone-lined crevices. The downside of a shallow cliff-base reef is sensitivity to swell: even moderate groundswell makes The Split and Crossroads unpleasant and potentially hazardous, so this is a calm-day site. At night the reef comes alive with octopus, crabs and sleeping wrasse, and because it is shallow it is one of the easier places in the bay to try a boat-based night dive.

Pair it with a deeper wall or cave dive elsewhere in the bay. Divers considering the shore approach should inspect the entry beforehand and remember that the exit is up a long climb in heavy gear.

From Eaglehawk Neck take Blowhole Road/Tasman Arch Road towards Tasman Arch and continue to the Waterfall Bay car park, which has toilets and a lookout. The Marine Life Network guide describes shore access down to the northern end of the bay, but the descent is steep and gear must be carried a long way, so it only suits fit divers in calm weather. Most divers visit by boat with Eaglehawk Dive Centre or Go Dive Tasmania, about 7-8 minutes from the Pirates Bay jetty; boats stand off in the lee of the bluff while divers drop onto the reef.

Waterfall Bay is the most sheltered part of the Tasman Peninsula's ocean coast and is the site operators fall back on when the Sisters and Hippolytes are blown out, because the bay faces east-north-east and the high cliffs block westerly and south-westerly winds. It is cancelled by easterly and north-easterly winds and by large south-easterly swell wrapping into the bay, which drives heavy surge into the caves and gutters. For cave and swim-through dives the swell needs to be small (well under about 1.5 m) or the surge becomes dangerous.

Heavy rain turns the waterfall on and can put a fresh, tannin-stained layer on the surface for a day or two. Late summer and autumn give the calmest, clearest conditions; winter mornings with westerlies are often excellent.

Start at the bluff, find The Split and swim it only if there is no surge, then continue along the reef to the Crossroads cave junction. The whole dive stays in 5-9 m, allowing a long, relaxed tank; finish back at the pick-up point with a safety stop in the kelp.

Eaglehawk Dive Centre and Go Dive Tasmania – used as a shallow Waterfall Bay option for training and second dives; club and private divers occasionally from shore.