Waterdown, and its associated Great Falls, (also called Grindstone Falls, so named for the Grindstone Creek that feeds it, or Smokey Hollow Falls, so named for the smoke rising from the hollow from the mills, or Barnes' Falls, named after the Barnes family who owned the property until 1978), are located on the local portion of the Bruce Trail System in Ontario. Many national and regionally rare flora species grow in the natural areas of Waterdown.
The Smokey Hollow falls originally powered a sawmill and gristmill when the town was founded, and later a number of other small mills, and as a result of demand on the limited water supply, time shared the water. The last operating saw mill (Slater's Lumber Mill) continued to produce lumber well into the 1970s. It was located along the Grindstone Creek behind the Knox Presbyterian Church at the corner of Mill Street North and Church Street. During the 1950s and part of the 1960s the mill used horses and heavy tackle to haul the logs to the cutting area. Today, only remote foundation ruins of the mills remain, although a lookout over the falls and a signboard detailing the history of the area is in place.
Furthermore, Waterdown also has many wetland trails in the eastern end of town which are well marked and have informational signage.
Tourists may come to Waterdown in October and November to visit the Rotary Haunted House which has been in operation for 16 years (as of 2008). Until 2006 this haunted house was operated by the Rotary Club of Waterdown, and is now operated by the Rotary Club of Hamilton.
Also of interest are several historical buildings which remain from the founding of the town, these include the American House, the library, the Rotary (originally the town hall), and several private residences.
Waterdown is also home to local community institutions such as Pickwick Books, Red Sky Design, Waterdown Cycle and the Waterdown Legion.
Waterdown is also home to a hockey arena, Harry Howell Arena, which is home of the Flamborough Hockey Association the Flamborough Girls Hockey Association, and the Flamboro Skating Club
Each July 1 weekend Waterdown hosts of the Oh Canada! Ribfest, a joint community focused event sponsored by the Rotary Clubs of Flamborough AM and Waterdown. Tens of thousands of people, from Waterdown and surrounding communities, fill Memorial Park enjoying local music artists, dancers, midway rides, kids' activites, and of course tasty ribs!