Old Man's Hat is named for the hat-shaped rock on the skyline of North Head's inner cliff, and beneath it lies what most Sydney divers regard as the best sponge garden in the harbour. The headland runs east–west for about 1.5 km and the reef below it is a broad apron of small boulders on sand cut by low walls, with much bigger boulders off the reef edge forming very spectacular walls, overhangs, small canyons and a couple of very good swim-throughs. The sand edge sits at 22–24 m and deepens toward the ocean; the interesting structure is between 12 and 22 m.

Sydney Dive Charters describes it as a boulder field 'with colourful tulip and vase soft corals'. The fixed life is the reason for its reputation. Sponges of every colour, sea squirts and ascidians, gorgonian fans, sea tulips and soft corals cover the shaded faces so densely that the rock disappears; basket stars unfurl on the fans at night.

Among the mobile life, bream, sweep, luderick, yellowtail and black-reef and six-spined leatherjackets are constant; weedy sea dragons live on the sandy fringes; red indianfish are found occasionally; wobbegongs and bull rays lie in the gullies; and in late winter Port Jackson sharks pack into the overhangs in large numbers. Moray eels, crayfish and blue groper complete the picture. The Centurion clipper struck the rocks here in 1887 before sliding off into deeper water (her remains lie nearby off Quarantine Point), so the site has history as well as colour.

Being on the inner face, Old Man's Hat is diveable in almost any north-easterly weather and is the classic 'plan B' that turns out better than plan A. The tidal current along the wall sets up an easy drift. It suits Open Water divers upward, photographers of all persuasions, and night divers; it is inside the North Harbour Aquatic Reserve, where spearfishing and collecting are banned.

Boat only. Dive Centre Manly loads at Manly Cove beach beside the wharf; Pro Dive Manly and Sydney Dive Charters load at the Little Manly boat ramp (end of Stuart Street, Manly – free parking, set-up benches, toilets at the reserve); Sydney Dive Charters also picks up at Rose Bay public wharf. From Manly the run is 10–15 minutes across North Harbour to the inside of North Head, 20–25 minutes from Rose Bay.

Private boats launch at Little Manly, Roseville Bridge (Middle Harbour, 30 minutes) or Rose Bay. Boats anchor on the reef in 15–20 m or run in toward the cliff and drop the anchor when the bottom appears; there are no moorings, and many abandoned anchors litter the reef.

The inner face of North Head is the most sheltered ocean-quality diving in Sydney. It faces west-south-west into the harbour, so it is protected from the north-east sea breeze and from northerly and easterly swell, and is at its best when a strong north-easter is blowing and every ocean site is rough. It is exposed to southerly swell rolling through the Heads: a big southerly (over 2 m) sends surge along the cliff and dirties the water, though the deeper sponge gardens are usually still diveable.

Tidal current runs along the wall, east on the flood and west on the ebb, strong enough to plan a drift; slack water is easiest for novices. Visibility is 10–15 m on average, 25 m on winter westerlies, and drops after heavy rain when the harbour flushes brown. Ferry, shipping and small-boat traffic through the Heads is constant – ascend on the anchor line or a DSMB close to the cliff.

Anchor in about 20 m. On an incoming tide head east (toward the ocean) along the sand edge at 22 m for 10 minutes, then come up to 18 m and work back west through the big boulders, walls, overhangs and the two swim-throughs, finishing at the anchor after about 38 minutes; on an outgoing tide reverse the direction. Many abandoned anchors on the reef make useful waypoints.

Safety stop on the anchor line.

Dive Centre Manly – double boat dives most weekends and some weekdays from Manly Cove (10–15 minutes); Pro Dive Manly – weekend double boat dives from Little Manly; Sydney Dive Charters – guided double dives Thursdays and Sundays from Little Manly ramp and Rose Bay wharf; Frog Dive, Abyss and Dive 2000 on club/charter days. North Head is the default Sydney boat dive when ocean sites are blown out.