The story is thematically concerned with Christian redemption, though Kingsley also uses the book to argue that England treats its poor badly, and to question child labour, among other themes.

In it, Kingsley expresses many of the common prejudices of that time period, and the book includes dismissive or insulting references to Americans,[a] Jews,[b] Blacks,[c] and Catholics,[d] particularly the Irish.

[f] The book had been intended in part as a satire, a tract against child labour,[5] as well as a serious critique of the closed-minded approaches of many scientists of the day[6] in their response to Charles Darwin's ideas on evolution, which Kingsley had been one of the first to praise.

He had been sent an advance review copy of On the Origin of Species, and wrote in his response of 18 November 1859 (four days before Darwin's book was published) that he had "long since, from watching the crossing of domesticated animals and plants, learnt to disbelieve the dogma of the permanence of species," and had "gradually learnt to see that it is just as noble a conception of Deity, to believe that He created primal forms capable of self development into all forms needful pro tempore and pro loco, as to believe that He required a fresh act of intervention to supply the lacunas which He Himself had made", asking "whether the former be not the loftier thought.

[9] In The Water-Babies, Kingsley tells of a group of humans called the Doasyoulikes who are allowed to do "whatever they like" and who gradually lose the power of speech, degenerate into gorillas and are shot by the African explorer du Chaillu.

[11] Huxley wrote back a letter (later evoked by the New York Sun's "Yes, Virginia, there is a Santa Claus" in 1897): My dear Julian – I could never make sure about that Water Baby.

[11] Only where men are wasteful and dirty, and let sewers run into the sea, instead of putting the stuff upon the fields like thrifty reasonable souls; or throw herrings’ heads, and dead dog-fish, or any other refuse, into the water; or in any way make a mess upon the clean shore, there the water-babies will not come, sometimes not for hundreds of years (for they cannot abide anything smelly or foul) : but leave the sea-anemones and the crabs to clear away everything, till the good tidy sea has covered up all the dirt in soft mud and clean sand, where the water-babies can plant live cockles and whelks and razor shells and sea-cucumbers and golden-combs, and make a pretty live garden again, after man’s dirt is cleared away.

Catherine Judd points out that the city, the loud coal mining engines, and the stultifying country manor of a British landowner are all contrasted with an Edenic Northern English landscape.

[13] With detailed descriptions of native fauna, Kingsley immerses his protagonist into a variety of biodiverse terrestrial and aquatic ecosystems so that readers are drawn to see themselves as part of nature.

Though many of the main elements are there, the film's storyline differs substantially from the book's, with a new sub-plot involving Tom saving the Water-Babies from imprisonment by a kingdom of sharks.

[14] The book was also produced as a play by Jason Carr and Gary Yershon, mounted at the Chichester Festival Theatre in 2003, directed by Jeremy Sams, starring Louise Gold, Joe McGann, Katherine O'Shea, and Neil McDermott.

[19] In 2019, the story was adapted into a folk opera performed at The Sydney Fringe[20] Australia from a musical score and libretto composed by musician and librettist Freddie Hill in 1999.