Darren Emerson started Underwater Records in 1994. Initially to release records for his friends, the label has, since its inception, seen releases from Emerson himself, Meeker, Ned Flanders, Christian Smith and John Selway, Steve Mac, Wally Lopez, Greg Churchill, Sharam Jey, Mutiny and Tim Deluxe whose releases Sirens/ We All Love Sax and It Just Wont Do, put Underwater firmly in place on the independent label spectrum. The first album released on the label, a compilation mixed by Emerson and Deluxe, was released summer 2002, entitled Underwater: Episode One, exclusively including Emersons limited edition solo track H20 Underwater: Episode Two was released in June 2003 and mixed by Emerson and Mutiny whilst in 2004 Paul Jackson mixed Underwater: Episode 3 alongside Emerson. In 2005 Darren went head to head with Sharam Jey for Episode 4. 2006 saw him alongside Magik Johnson mixing Underwater Episode 5.

Emerson signed Icelandic band Gus Gus to the label, their critically acclaimed album Attention was released in October 2002 and bought another facet to the label; they were also named as the touring support act for Moloko in 2003. Gus Gus last single taken from the album Desire was released in November with a special remix from Ian Brown (Stone Roses).

2003 also saw Underwater release Tim Deluxes first ever solo album The Little Ginger Club Kid, also tracks from Paul Jackson with the huge monster The Push (the vocal version courtesy of Steve Smith from Dirty Vegas was released in Jan 2004), Sam La More, Paul Woolford, Tony Senghore, Sharam Jey, Mutiny, Wally Lopez and more

2004 and the label released an album from Mutiny, and tracks from Greg Churchill, Random House Project, Rune RK, Sharam Jey.

2005 a busy year with releases from Darren Emerson presents H20, Sharam Jeys debut album 4 Da Loverz including the singles 4 Da Loverz and Push Your Body, Pnaus debut album Again with the single Enuffs Enuff released. Also the track She Loves It from Eyerer & Chopstick with brand new 2005 remixes.

2006 saw Underwater releasing a new compilation series entitled Solo with the 1st instalment mixed by Bristol duo Deepgroove, singles by Arthur Baker, Magik Johnson, Joel Mull, Beckster and D. Ramirez's massive hit La Discotek.

In 2007, the label dropped Paradox by Darko Esser and Benny Rodrigues, I Give Up by Magik Johnson with a John Dahlback remix as well as Deepgroove's Weekend Weapons vol.1 and 2 featuring Jus Luv Rave and The Marshall Plan. New signing Ingo Staar's first single Stuck In My Head, an electro stomper with Ian Brown style vocals went down well followed by D. Ramirez's La Discotek remixes by Darren Emerson, Shakedown, Cagedbaby and Emerson Todd. Ingo's second single C64 was a digital download only release with standout track Karbon.

2008 and the label released the long awaited Magik Johnson album, supported by singles East West Connection and The Bushman.