The performance of mineral wool pipe insulation employed to insulate the underground pipes in district heating and cooling systems has been investigated when it is subjected to underground water attack. The pipe fluid temperature was tested from 35°F(1.6°C) to 450°F(232.2°C). The surrounding water was maintained from 46°F (7.7°C) to 100°F (37.7°C) to simulate the possible conduit water temperatures when the system fails. Under heated conditions (pipe temperature higher than water temperature), the effective thermal conductivity of the wet mineral wool insulation can be, depending on the insulation and the surrounding water temperatures, 50 times higher than that of dry insulation. The effective thermal conductivity data of wet insulation were correlated as functions of insulation mean temperature and surrounding water temperature. Correlations have also been developed in the form of a Nusselt number vs. a Rayleigh number. Under cooled test conditions (pipe temperature lower than water temperature), the effective thermal conductivity of saturated mineral wool is about 14 times higher than that of dry mineral wool. For both heated and cooled conditions, after drying, the effective thermal conductivity returned to the value before submersion.