The Waterfall takes its name from the spring that seeps out of the North Head cliff above it, leaving a permanent dark streak on the sandstone that boat skippers use as their mark. Below it the cliff collapses into a 45-degree boulder field that runs from the shallows down to a sand edge at about 22 m, and this slope, rather than any wall or cave, is the dive: a jumble of blocks from car-sized to house-sized with gaps, overhangs and channels between them, all on the sheltered inner face of the headland. Dive Centre Manly lists it at 14–22 m as an Open Water site, and Sydney Dive Charters describes it simply as a '45-degree angle boulder field under a natural spring'.

It is a sponge dive. The shaded undersides of the boulders carry sponges, sea fans, sea tulips and soft corals almost as rich as Old Man's Hat's, with nudibranchs grazing across them, and because the site is shallower and the slope gentler it is the one Manly operators favour for newer boat divers and for photographers who want long bottom times. Weedy sea dragons live along the sand line, wobbegongs and Port Jackson sharks tuck under the blocks, blue groper follow divers up the slope, and yellowtail, leatherjackets, bream and old wives school through the gaps.

Bull rays pass over the sand. The Waterfall is inside the North Harbour Aquatic Reserve, protected from the north-east sea breeze by the headland and diveable on most days of the year; only a large southerly swell running through the Heads puts surge onto the slope. Tidal flow is light.

It suits Open Water divers on their first ocean boat dives, anyone wanting a relaxed second dive after Bluefish Point or Old Man's Shoulder, and macro photographers. It is one of the North Head group of sites, together with the Sponge Gardens, Adamson Sponge Gardens, Red Indian Point and Fairfax Lookout, that between them give Manly its reputation for sheltered, colourful reef diving.

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 Waterfall is identified from the boat by the dark stain and seep of fresh water down the cliff between Old Man's Hat and the Quarantine Station side of the headland.

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.

Descend the anchor to the boulder slope at 16–18 m. Work along the slope on the tide with the cliff on one side, dropping to the sand edge at 20–22 m to look for sea dragons and rays, then return at 12–14 m through the sponge-covered upper boulders. Safety stop on the anchor line; do not surface away from the boat.

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.