The Waterways is a large series of aqueducts, the original purpose of which is never revealed, though the dungeon appears to have once been connected to a train line formed from the same materials as the various buildings and locations associated with the Ferines. The outside of the dungeon is simply a long corridor, but the interior houses a complex maze with secret rooms and mechanisms that release streams of water through the canals, hence the dungeon's name.
When the group arrives at the Waterways, Jay, Poppo, and Quppo meet with Senel Coolidge, Chloe Valens, Will Raynard, and Norma Beatty at the top of the entrance. With the Crusand escort approaching, Jay reviews the plan: Will and Norma will launch Crystal Eres at the front of the unit, slowing the enemy. Quppo will then shout loudly with the other Oresoren hiding on the other side. Next, Senel and Chloe will hide near the entrance and wait for Jay to throw a smoke bomb, then run and rescue Shirley. After this, they must make their escape through the Waterways and use the emergency passage. Although Jay is a bit nervous when he sees Senel and Chloe, he orders everyone to get into positions. While in hiding, Jay notices only two of the Terrors are present, which worries him. Just as he is about to begin the operation, someone shouts. However, it is not the Oresoren; it is actually Moses Sandor and his bandits, who launch a sneak attack of their own. Jay then alters his plan a bit. He decides to send the signal to Senel and Chloe, while Will and Norma provide support with their Eres. As Jay releases the bomb, Senel and Chloe find themselves fighting against Stingle, and Moses becomes engaged in a rematch with Melanie.
Shirley manages to free herself, but is spotted by some guards. However, thanks to Will's Lightning, she manages to escape. Jay then orders Norma to support Senel and Chloe. Shirley manages to free Fenimore Xelhes and run. Senel becomes distracted for a moment, but is saved thanks to Norma using Grave, and both he and Chloe make their way to the entrance. Everyone then rushes into the ruins, with Melanie, Stingle, and Moses not far behind. Jay is glad the others were able to make it inside as planned, though he is not too thrilled about the bandits' attack. Will and Norma regroup with Senel and Chloe, and begin to chase after Shirley, who went on ahead. They find the two girls cornered by guards, but Chloe renders them unconscious with a single Demon Fang. Melanie catches up to them and opens a floodgate, allowing water to overcome the group. Shirley tries to catch up, but the gate closes in front of her. In a corner of the rushing current, Senel hangs on until he sees Chloe struggling. He then swims to her and attempts to keep her head above the water threatening to overcome them.
Meanwhile, Shirley and Fenimore are cornered and saved yet again, this time by Walter Delques. Elsewhere, Senel manages to wake Chloe and explains that they are at the bottom of the Waterways. He reveals that he quickly noticed Chloe was unable to swim, which is why he rescued her. Chloe is a bit upset, since she was trying to keep her inability to swim a secret, but the two proceed to make their way back up to Will and Norma. As Shirley and Fenimore keep running, Walter tells them of a secret room nearby, and that they should hide there while he keeps Melanie and Stingle occupied. Elsewhere, Senel and Chloe meet with Will and Norma and begin the search for Shirley once again. It is then that the four run into Moses and Giet, who were caught in the flooding, as well. Inside the secret room, Fenimore notices that Shirley has a fever due to seawater somehow mixing with the water from the Waterways.
Walter arrives in the secret room, but is badly wounded from the fighting. He warns Shirley and Fenimore that they have to leave. When Fenimore asks why, Walter explains that it is because it is his mission. He also reveals that Shirley is the Merines. Fenimore explains that when she was captured, she hoped and prayed that the Merines would come to save her people, but she is mad that it was Shirley all along. She then reprimands Shirley for being around Snele while her friends were being killed. Walter stops the argument and says that he had faith in Shirley, before fainting from exhaustion. Suddenly, the "Gemini Shell" Shirley received from Pippo begins to glow. Meanwhile, Senel's shell begins to glow as well, so he leaves in search for Shirley.
The group manages to find the secret room, but, while Fenimore and Walter are there, Shirley is not. Fenimore explains that Shirley acted as the decoy to lure the others away in order to protect them. Since this was only moments ago, the group figures they might be able to catch up to them. Upon catching up to them, they find that Melanie has summoned a giant "Citadel Turtle" so divert the group's attention. After defeating it, they venture outside the Waterways only to find that Shirley and her captors are already gone. While Will and Norma heal Walter's wounds, Fenimore explains what happened before the group arrived earlier. Fenimore then expresses her gratitude, and Walter finally awakes and carries Fenimore with him. Quppo arrives later to inform the group that Shirley's escort is traveling to the Ruins of Frozen Light, where Vaclav Bolud's main forces are stationed. The group decides to make their way there.
During Will's Character Quest, the group comes to the Waterways at Will's request to investigate the water and soil there. Inside, Will charges into the ruins, while the others attempt to keep pace with him. Along the way, the group passes a rare monster, but Will pays no attention to it and keeps going. Senel suspects Will's persistence is due to him being worried about Harriet Campbell. The group then notices a disturbing smell coming from the back of the ruins, and they eventually reach the source at the bottom of the Waterways. There, they find black mist everywhere, which suddenly comes together and forms a dark version of Will. Even after defeating the mysterious impostor, the mist spreads. Fearing it, the group begins to retreat, but Will does not move.
After asking Senel what it means to keep a promise, Will uses his Sacred Eres to try to dissolve the mist. In the darkness, a mysterious woman appears before Will, offering to end his suffering through nothingness, but he hears Senel's voice tell him that Harriet is still waiting for him. It is then that Will remembers his promise to Amelia Campbell, as well as remembers that promises are meant to be kept by those he trusts. Using the light of his Sacred Eres, the dark mist vanishes. Efreet then appears, but Grune is the only one capable of seeing him. He decides to rest until her memory fully recovers. After returning to seed form, Grune plants the seed near the water's edge before everyone returns to Werites Beacon.