Waterfall Bay is the heart of the Eaglehawk Neck diving area, a deep bay walled by dolerite and sandstone cliffs where a creek pours over the clifftop after rain. Underwater the cliffs continue vertically in places and break into huge boulder gardens elsewhere, creating a maze of canyons, gutters and swim-throughs that the dive centre describes as caves without ceilings. The wall section drops from kelp-covered shallows at 5 m to sand at 20-25 m, and it is one of the most colourful temperate walls in Australia.

The rock is densely packed with jewel anemones and golden zoanthids in shaded sections, and with sponges, sea whips, hydroids and ascidians on the deeper faces. Butterfly perch and bullseyes hang off the wall, banded morwong and blue-throated wrasse patrol the boulders, and weedy seadragons are found in the kelp and on the sand edge. Fur seals from nearby haul-outs sometimes swing through.

Several separate drops are made along the bay depending on the group, from gentle boulder slopes in 8-12 m suitable for new Open Water divers to canyon runs and deeper wall sections for experienced divers. Go Dive Tasmania also runs Waterfall Bay as a night dive, when octopus hunt across the boulders, fish sleep in the cracks and bioluminescence sparks at every fin kick. The bay is a net-free area within the national park waters and fish life is noticeably richer than on open coastline.

Because the cliffs give shelter from westerly winds, Waterfall Bay is the most reliably diveable part of the peninsula, which is why most visitors do at least one dive here. It suits a broad range of divers: beginners get an easy, spectacular reef in good visibility, while photographers can spend dive after dive on the invertebrate walls. Combine it with Cathedral Cave or Patersons Arch for a full day in the bay.

Boat access only. Drive from Hobart on the Tasman Highway to Sorell, then the Arthur Highway through Dunalley to Eaglehawk Neck (about 75-80 km, 1 hour 15 minutes). Eaglehawk Dive Centre is on Pirates Bay Drive above the bay; divers kit up at the centre and the catamaran leaves from the Pirates Bay jetty/boat ramp at the northern end of the Neck (Old Jetty Road).

Go Dive Tasmania meets at The Adventure Lodge in Taranna and launches at Eaglehawk Neck or Port Arthur depending on conditions. Waterfall Bay is about 8 minutes south by boat from Pirates Bay, past Tasman Arch and Devils Kitchen; boats pick up a mooring or hover in the lee of the cliffs.

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.

Drop in at the base of the cliff, descend to the boulders at 18-22 m and work along the wall with the cliff on one shoulder. Swim through the canyons and gutters at 10-15 m on the way back, check overhangs for seadragons and rock lobster, and finish in the shallows under the cliff for a safety stop with the kelp.

Eaglehawk Dive Centre – almost daily as first or second dive; Go Dive Tasmania – Waterfall Bay day and night dives (8-25 m, Open Water to Advanced) from Eaglehawk Neck; Tasmanian Scuba Diving Club – club boat days.