This level begins near a Warp Pipe, which takes the player underwater. Cheep Cheeps and Mega Cheep Cheep are found next to a ? Block. The next section contains Spiny Cheep Cheeps, along with Bloopers and a Blooper Nanny in Warp Pipes. More Bloopers are found hiding behind scenery, along with a Red Ring. A Warp Pipe blowing a current of bubbles is before the midway point. Following the midway point, more Warp Pipe currents and Bloopers are encountered. A yellow Warp Pipe is found under a row of Brick Blocks, leading the player to a bonus area, where one of only two Cheep-Chomps in the game can be found. The next section contains many Bloopers, as well as Warp Pipe currents, which can be disabled by a P Switch on the ceiling. A Starman can be found in a ? Block on the end of a row of Brick Blocks. Many Warp Pipes are found throughout the section, as well as ? Blocks that contain more Starmen if the player is invincible. A Warp Pipe is found at the end of the area along with a Blooper, taking the player out of the underwater area. The flagpole then follows.
- Cheep Cheep - 7
- Mega Cheep-Cheep - 3
- Spiny Cheep-Cheep - 3
- Blooper - 22
- Blooper Nanny - 2
- Star Coin 1: Not long after the midway point, there is a P Switch on the ceiling. Mario and co. should activate the P Switch to both summon Coins and stop the nearby Warp Pipes from blowing wind, then follow the track of Coins to an upside-down Yellow Pipe. This Pipe leads to an area where the first Star Coin is floating high in the air. Mario and co. should hit one of the ? Blocks (both if not Super) to get a Penguin Suit and freeze the nearby Cheep Cheep. This gives Mario and co. a platform to jump from and collect the Star Coin.
- Star Coin 2: Not far from the Pipe that leads from the area with the first Star Coin, the second Star Coin is floating in between two Green Pipes. Mario and co. must swim down to it while avoiding any Bloopers or Cheep Cheeps.
- Star Coin 3: Just before the exit Pipe at the end of the level is a platform protruding from the ground. Inside this platform is a hidden area, which contains the third Star Coin.