Combat in water environments has much to do with the amount of immersion of the combatants as well as their ability to navigate the environment while burdened.
Cover-Ranged or Missile Attacks. Fully immersed creatures within 5 ft. of the surface have 90% cover from those above the surface. Those deeper have 100% cover.
Cover-Melee Attacks. There is no cover with regard to melee attacks. However, some attackers will suffer penalties when attacking in water. See below.
Swimming While Holding Something. A creature typically requires all of it's limbs to swim unless the GM rules otherwise. If swimming while holding something using less than 50% of the creatures limbs, the creature's swim speed will drop by half. If a creature cannot use 50% or greater of its limbs to swim, it will begin to sink. If the creature would otherwise be able to swim, it can tread water for 1 round before sinking.
Spells. Any creature that becomes immobile (such as engaging in spell casting) will begin to sink at 10-ft. per segment, see Sinking, below. The barrier between air and water will break line of effect (in either direction). Spells cast by a fully submerged spell caster have line of effect as normal with areas, objects, or creatures also underwater.
Weapon Usage. Melee: Underwater, only thrusting or natural weapons may be used. Ranged Attacks: If attacking from the surface into water, see partial immersion below or cover effects.
Sometimes creatures will fight only partially immersed in water. Aquatic or native swimmers are adjusted as described above (these adjustments do not stack). The adjustments below are for the creature partially immersed:
Up to knees. No Dex bonus to AC; -1 Attack and damage rolls (minimum 1 point of damage)
Waist high. No Dex bonus to AC; 50% cover vs. ranged attacks; -2 Attack and Damage rolls (minimum 1 point of damage)
Higher than the waist. No Dex bonus to AC; 75% cover vs. ranged attacks; -4 Attack and Damage rolls (minimum 1 point of damage)
Creatures with the Aquatic Sub-type. These creatures can move at their listed swim speed as a major action without penalty, have acute senses when in water, and conduct combat without penalty due to being in or under water. They are affected normally by currents (affecting speed).
Non-aquatic Creatures with a (Native) Swim Speed. These "native" swimmers do not enjoy all the benefits of aquatic creatures while submersed in water, but can operate much better than non-native swimmers:
Movement. [move] (major) No effect. These creatures can move at the listed swim speed without penalty due to a water environment.
Initiative and Armor Class. No effect.
Combat Adjustments. These creatures suffer a -2 penalty to attack and damage rolls if under water or in water higher than their waist.
Creatures without a Swim Speed. Creatures without a native swim speed operate less effectively in water:
Movement. [move] (delayed; major) Humanoids trained to swim can do at at 1/3 their normal land-based (walking) speed. Those without training can swim at a maximum of 10-ft. per round. Non-humanoids can swim as a trained humanoid (per the GM).
Initiative. All such creatures suffer the delayed condition.
Armor Class. These creatures do not gain a positive Dexterity adjustment to AC.
Combat Adjustments. These creatures suffer a -4 penalty to attack and damage rolls.
Armor. Creatures without the aquatic sub-type can swim in leather armor (not studded) or magic armor of any kind. If wearing different armor, refer to the rules for swimming below. Creatures with the aquatic sub-type may be able to wear additional (special) armor types per the GM.
Swimming Unencumbered. A creature can swim (normally) per above rules if unencumbered and holding 20 lbs. or less of total encumbrance. A creature can swim normally with greater (or less) encumbrance as modified by Strength.
Tread Water. [move] (major) A creature can tread water (maintaining position if no current) holding 40 lbs. or less of total encumbrance. A creature can tread water with greater (or less) encumbrance as modified by Strength—In the case of simply treading water, this adjustment (if positive) is doubled.
Sinking. A creature that cannot swim or tread water due to encumbrance will sink at a rate of 100-ft. per round (10-ft. per segment). If attempting to swim, the rate of sinking is adjusted downward equal to 1/3 of the creature's movement rate (to a minimum of 40 feet per round of sinking).
Holding Breath While Active. A creature can hold their breath while performing strenuous activity (like swimming) for a time period equal to 1 segment per point of Constitution. Once this period expires, the creature begins to drown.
Holding Breath While Inactive. If able to take a deep breath, a creature can hold their breath while inactive for a time period equal to 2 segments per point of Constitution. Once this period expires, the creature begins to drown. Inactivity allows for some small movement (retrieval/consuming a potion, using a magic item with command word, slicing armor straps, etc.).
Drowning. Drowning takes 3d6 segments, and during this period the character can do nothing but writhe in panic (treat as stunned for combat purposes), though it is possible he or she could be dragged to safety. Such a saved character will suffer hit points of damage equal to the number of segments spent drowning. If not brought to air before the segments of drowning are up, the character is dead. If any cure wounds spell is cast on the character within 5 rounds of death, the character will revive to the 1 hit point level. One breath of air taken, for example, from a sealed scroll case or air bladder, will enable a swimmer to remain underwater for another time period equal in segments to his or her Constitution score.