1.The ocean floor
Start by creating a plane 300 x 300, 30 length and width segments
Put a noise modifier on the plane, this will add the irregularities to the ground. Scale 40. Change the Z strength to 8.0. You can add a sand texture to the ground to add more realism. Right click on the ground plane and choose freeze selection. This will prevent you from accidentally moving the plane.

2. Camera is a must
Place a camera in your scene to a desirable view. I chose this angle to place my camera. You want to get a view that doesn’t allow you to see the outer edges, don’t worry about the far edges, we will next add a fog effect to the scene so that they wont be visible.

3. Setting fog
If you don’t have any objects to place in your underwater scene, just create a teapot and a couple of boxes so that you can properly test the fog effect. Set up three objects so that one is close to the camera, the next one is further away, and last one is the farthest away. Hit 8 to bring up the Environment and Effects dialog box. Under atmosphere select add and select Fog and hit ok. Under Fog Parameter, check fog background, type standard, far % 100.0. Choose a bluish color for the fog color.

4. The Environment Range
The environment range on the camera controls where the fog effect starts in relationship to the camera. The camera now needs to set up to receive the fog effect so the next step is setting up the environment ranges on the camera. Select the camera, under parameter choose “show” Under environment ranges. Change the far range to reach the edge of your ground plane. Anything behind the far range will become foggier and less visible. Doing a quick render, you should see that the object farthest from your camera is barely visible and the object closest to your camera is the most visible.

5. Lighting the scene

Now its time to add some lighting. This is the trickiest part to creating an underwater scene. Start my throwing in a couple omni lights surround your environment. This primary purpose is to get shadows into your scene. The omni lights don’t have to be too bright. I turned my two omni lights down to a multiplier of .5 each and gave one of them an area shadow. To do this, select Tools – Light Lister to display all of your lights in the scene. Then choose the light you want to turn on shadows and check the shadows check box.

Now to add the advanced effects to the lighting. From your left view draw out a target spotlight so that the spotlight is shining down onto your scene at an angle. Click on the modifier panel to get to the spotlight parameters.
Under General Parameters, turn on shadows and select shadow map.
Under Spotlight Parameters, increase the falloff field to soften up the spotlight. I have the Falloff/Field set to 36 and Hotspot/Beam to 13. Check atmospheric shadows, this allows the atmospherics effects to effect the shadow, since our fog is blue, then the shadows will have a bluish color.
Now here is the fun part. In order to get the caustic water effect that casts on the ground of the ocean floor, we are going to add a projector map to the spotlight. Under Advanced Effects click on the click on None button under Projector map. It will then bring up the material browser. Doubleclick on bitmap to browse for a map. You are going to apply the caustic water texture seen below.

Right click and save as if you don’t have it yet. You can use any caustic water texture you want to get different results.
Under Atmosphere and Effects, choose add, volume light, the click on setup. This will bring up the same environment dialog box you added the fog with. Make sure that you have Volume Light selected before changing the parameters. Turn the density down to around 1.5 and the max light to about 85. This is going to add a volume light to your spotlight and is going to take a while to render. Click the render button and grab a sandwich. While setting up your environment, it’s a good idea to turn this off when test rendering other effect.

6. Finishing up
The last thing you need to do is just add your objects to your scene. I added a submarine, shark, some plants and some pillars that I modeled. You can also try adding projector maps to your omni lights get various different caustic effects..

Here is my final result.