The great thing about dreams is that you can live anywhere. Being underwater can be a potentially threatening experience, as with drowning. However, it can just be the place you are, hanging out with the other dream characters.
Dreams of this nature may be wish-fulfillment, especially if you have an affinity for ocean life at some level. It may also be a desire for escape from the more mundane experiences of land-locked living.Perhaps the most interesting effect of underwater dreams is when the appearance of the dream environment seems as if it is underwater even when it is not. People may be moving in slow motion, you may feel particularly buoyant, or there may be aquatic life intermingled with the above-water scenery. In dreams of this type, the dreamer may be feeling a need to escape or slow down the pace of life in order to observe the circumstances more accurately.
If you have been underwater in a dream, do you recall feeling like it was a "normal" environment for you, or were you nervous in the situation?