Parker Inlet is a small, stunning cove where the tea-coloured Parker River meets the sea between two low headlands on the eastern side of Cape Otway. A 100 m beach sits at the back of the bay, rock platforms line both sides of the entrance and the reef runs out from them into 5–10 m of water. It is best known as a stop on the Great Ocean Walk and as the beach below Parker Hill campground, and the 300-step descent keeps casual visitors to a minimum. For divers the attraction is the reef on either side of the inlet: large slabs and angled gutters cut into the platform, kelp-covered bommies just offshore and, in the Scuba Doctor's words, plenty of challenging reef to explore north and south of the entrance. The community is the productive open-coast mix found all around the cape – bull kelp and thick brown algae on the ridges, encrusting sponges and ascidians in the shade, abalone and southern rock lobster in the cracks, and schools of ocean-going fish such as sweep, salmon and trevally working the deeper water off the points. Wrasse, magpie perch, zebrafish and leatherjackets are constant, and Port Jackson sharks and rays turn up on the sand.

It is a wilder and more committing dive than Blanket Bay because the entrance takes swell directly and the rip is permanent, and because the carry back up the steps with wet gear is a genuine effort. It rewards a settled summer day with a beautiful, empty dive that almost nobody does, and it pairs naturally with a night at Parker Hill campground. Weak or average swimmers should not consider it; the sea state at the entrance should be assessed from the lookout before committing to the steps, and the beach and platforms should be checked again at the bottom.

From the Great Ocean Road take Lighthouse Road (C157) toward Cape Otway, then Blanket Bay Road and the signposted turn to Parker Hill campground (2WD in dry conditions, about 3 hours from Melbourne). Park at the campground car park, where a lookout gives a view of the cove and its rock platforms so you can judge the sea. The beach is reached by a steep track and about 300 steps down through the scrub, a short section of the Great Ocean Walk; allow 15 minutes down and considerably more back up with wet gear.

The beach is 100 m long between two 50 m headlands, with a shallow bar and a permanent rip at the river entrance.

Cape Otway is the most exposed headland on the Victorian coast and all of these coves face the open Southern Ocean or Bass Strait. Diving requires a day of exceptionally good weather: calm seas, no swell (under about 0.5 m) and no rough weather forecast, which in practice means summer and autumn under a high with offshore north to north-westerly winds; an offshore wind will flatten the sea inside the reefs. Waves average 1.5 m outside the reefs even on ordinary days.

Southerly through westerly winds and any swell over a metre make every entry dangerous. Conditions change quickly and a calm morning can be unworkable by midday. Walk to the point and look before gearing up.

Parker Inlet faces south-east; the entrance has a permanent rip and a shallow bar that break in any swell, and the river discolours the water after rain.

Enter from the beach beside the northern headland at mid tide, avoiding the rip in the centre of the entrance, and follow the rock platform out to the reef in 3–6 m. Explore the gutters and slabs north of the inlet toward Blanket Bay or south toward Point Franklin, staying within a few hundred metres of the entrance. Turn at half gas and return along the same platform, crossing the entrance well outside the bar to the beach.

No operator – independent divers and snorkellers on calm days; more often visited by walkers on the Great Ocean Walk.