How do you fish underground in Terraria? Buy a bug catching net from the trader and catch some bugs flying around. Ponds are your best bet, though there are others in the underground regions that have a higher bait lure chance. Once you have a fishing rod and bait, head to a body of water (or make your own large body of water with buckets).

-“Surface” fish are actually caught on the layer immediately above the multicolored mushroom layer. -Sky fish are still caught in the sky. -Ocean fish can only be caught if you hug the world border and see the water turn blue / normal ocean music plays. -Undeground and Cavern are extremely finicky.