How can I tunnel through water?

I'm trying to figure out how tunnel, both horizontally and vertically, through large bodies of water — preferably a method which can be used early in the game and which can be done with on-hand materials rather than a lot of setup.

In earlier versions of the game, water was permanently destroyed by blocks placed in it, allowing tunnels to be easily created by placing blocks, then hollowing them out. As of Terraria 1.1, however, blocks seem to "store" the water they were placed in, which is then released when they are mined. The official wiki doesn't yet describe any techniques for dealing with this change.

Solution 1:

Update: Sadly, this method no longer seems to work in recent versions of Terraria. Mannequins break instantly when lava makes contact with them. Statues survive the lava, but when water contacts it, obsidian is now created which displaces the statue.

Original answer: Okay, I've been poking it for a while, and have come up with a way to destroy any amount of water with just two items! This method does require you either tunnel around to get underneath the body of water you want to drain or stand in it while working, but it's still often faster than the old fill/dig method.

All you need is a mannequin (possibly other furniture as well, but something 2 blocks wide worked best in my tests) and a bucket of lava:

1. Dig a 2 by 3 hole underneath — but not connecting to — the body of water.
2. Place the mannequin in the hole, then drop the bucket of lava into it. Wait for the lava to settle.
3. Dig a channel from the water to your lava hole and watch the water vanish!¹
4. Dig out one of the blocks supporting your mannequin² and wait for the lava to settle.
5. Pick your lava back up.

Sadly, you can't reverse the process to destroy large amounts of lava — the lava will happily hover above the water, never making contact, forming obsidian, or being destroyed. Worse, attempting to pick up this glitch lava will destroy your bucket!

¹ The water vanishes because, when falling into lava, it should make obsidian. However, the mannequin prevents the obsidian from being formed (as they would occupy the same space) and the water is simply removed because it has no place to pool.

² If you aren't close enough to your mannequin chamber before breaking this block, the mannequin may fall in the lava and be destroyed. Bring spares!

Solution 2:

The only way to deal with the change is to pump, bail, or drain the water released as you dig out blocks. Bailing takes far too much time, and draining is hard to control. Pumps are the best option but you need to beat the goblin invasion for it. Before I have the Tinker & Mechanic, I dig around water, not through. If you want to place an air pocket underwater, you need 6 blocks and at least one empty bucket.

It's always easier to deal with the reduced amount of water you leak by using the old tunnel method than trying to drain the entire body of water.

Note that when a block has been placed in water and is "wet", the hookshot and ivy whip tend to release from the block immediately after attachment. For this reason, I like to build vertical tunnels through water one block wider so I can place dry walls after I pump out the water.

ASCII diagram: (X is dry bricks, O is empty space, W is water, Y is wet bricks)

  XOOX          XOOX          XOOX          XOOX
  XOOX          XOOX          XOOX          XOOX
  XOOX          XOOX          XOOX          XOOX
 XOOOOX  --->  XOOOOX  --->  XXOOXX  --->   XOOX
WYWWWWYW      WYOOOOYW      WYXOOXYW       WXOOXW
WYWWWWYW      WYOOOOYW      WYXOOXYW       WXOOXW

I build a 3-block wide shaft, but the principles are the same.

When building a horizontal tunnel that you expect water to drain through, put torches either in ceiling notches or underneath glass floor (only one glass block directly above the torch is needed, but I like to use 3 for aesthetics).

I strongly recommend you prioritize getting a goblin invasion asap so you can rescue the two new NPCs and build pumps, pumps are fantastic.

It might still be possible to destroy water with falling sand or silt, but I haven't tested it because I had pumps when I started digging my hellevator. That would provide an early-game alternative to pumping away the water you leak by tunneling. If you have tested, feel free comment or edit this answer. Falling sand no longer destroys water.

Solution 3:

It's still possible to dig through water, but it takes some more doing...

You have to fill in the blocks you want to dig through, like you used to in previous versions. Start from the bottom and don't forget the walls, so:

    WWWWWW    WWWWWW    WDDDDW
    WWWWWW    WWWWWW    WDDDDW
    WWWWWW -> WDDDDW -> WDDDDW
    WWWWWW    WDDDDW    WDDDDW
    WDDDDW    WDDDDW    WDDDDW

(W is Water, D is Dirt)

Then, save & exit the game, reload it, and go back to your tunnel. You can now dig out the dirt blocks, and the water will be gone from behind the dirt:

    WDXXDW
    WDXXDW
    WDXXDW
    WDXXDW
    WDXXDW

(W is Water, D is Dirt, X is Air)

It's a bit of a pain, but at least it still works. Remember that you'll respawn in your bed, so you might want to put a bed near your tunnel if it's far from your house.