The propagation of axial cracks in underwater pipelines was investigated by means of small-scale pipe experiments. The purpose of the experiments was to determine the effect of external water environment on crack opening characteristics. The development of the axial rupture was recorded by high-speed photography; measurements were made of the internal depressurization transient and the axial strain field. The measured depressurization histories agreed with the predictions of a one-dimensional transient fluid flow code. Results presented for underwater and in-air tests show that the external water environment produces a slower crack and a smaller crack opening area. A steady-state energy balance analysis was performed to investigate the various energy dissipation mechanisms present during pipe rupture. This analysis confirmed that the added inertial mass effect of the surrounding water may account for the reduction in crack speed and opening area.