Water is a type of terrain found in the Jungle. It allows the Spelunker to swim inside the block and jump off the surface. Spelunkers can jump directly off the top of water with a well timed jump to avoid Piranhas. It is impossible to take damage from water, as you cannot drown.
After falling deep enough into water, you cannot damage monsters by jumping on them. Caution is advised whilst fighting in water. It is possible to stomp monsters in water if they're close to the surface.
If the side of a lake is destroyed, all of its water from that level upward also disappears, provided it isn't in the frozen region. The same with lava.
Piranha can be found in water; in fact, they cannot survive outside of it. Other enemies can fall and act normally in water; however, if an unarmed fire frog, or an armed one in HD, falls into water, it is defused, becoming a normal frog. It is possible for this to happen while you are still holding it, resulting in it attacking you once you release it.
If a flooded cavern occurs, the jungle will be partially flooded with water. Many piranha are found in the flood water, along with Megamouth / Old Bitey. However, living piranha will not appear in a restless dead level; in that case, their skeletons will be found instead. Bodies of water can also be found in the Ice Caves, providing Piranhas an area to spawn.