Waterlip is the most northerly part of Cranmore Parish, lying past Tansey on the way to Stoke St. Michael.
It is so named because of the very deep and dangerous flooded ex-quarry nearby.
In the centre of Waterlip there is a building which used to be a small Methodist chapel; it has been converted very successfully into a private dwelling.
Under the main road runs a drainage culvert, part of which is believed to be of Norman construction – ‘a beautiful stone-built structure’ (in the words of a caver who was asked to investigate it in 2008). Water from the culvert eventually drains into the lake at Waterlip.