Lava

Lava is a substance found at an approximate 1900-2300ft depth in Terraria. Lava, with water, is the only way you can obtain obsidian, mixing (or touching) the two liquids will cause the creation of an obsidian block. This could be difficult due to the lack of water at -2100ft depths, Earthwelling is an effective way to harvest vast amounts of obsidian.

Lava functions the same as water, meaning you will lose air when submerged and you require Flippers to swim effectively in it.

Items that are thrown in the lava are destroyed. Therefore, use caution when you are accessing your inventory near lava.