The performance of fibrous glass pipe insulation used in district heating and cooling subjected to underground water attack has been investigated. The insulation was tested at pipe fluid temperatures from 35°F (1.6°C) to 450°F (232.2°C). The surrounding water was maintained at temperatures from 46°F (7.7°C) to 100°F (37.7°C) to simulate the possible conduit water temperatures when the system fails. The results presented include the effective thermal conductivity, the time required for moisture absorption, the drying rate, and the extent which the insulation can be dried out once the source of moisture is removed. It was found that the effective thermal conductivity of the wet fiberglass insulation can be from 52 to 185 times higher than that of dry insulation, depending on the insulation and the surrounding water temperatures. Both dimensional and dimensionless correlations were developed for the heat transfer data of wet insulation. After drying, the thermal conductivity of the fiberglass insulation reverted to the value before submersion.