Atlit-Yam, a settlement 400 m off the Israeli shore, is the largest (60,000 sq m) and most deeply submerged (8--12 m bsl) prehistoric settlement ever uncovered along the Mediterranean coast. The architecture of the dwellings, the lithic tool assemblages, and radiocarbon dating indicate habitation during the late Pre-Pottery Neolithic (PPN) period, ca. 8100--7500 B.P. Floral and faunal remains suggest that the village economy was complex, based on several different food resources acquired through hunting, incipient herding, fishing, and farming. These probably permitted year-round occupation. More importantly, however, Atlit-Yam is among the earliest communities to reveal evidence of maritime activity. From this site, new insights into maritime pursuits and the domestication of animals and plants, as well as early evidence for exploitation of water tables, the construction of wells in prehistoric times, and sea level changes will be forthcoming. Further study of Atlit-Yam may also contribute to our understanding of the process of colonization of the Mediterranean islands.