Waterfall is Squirtle's Up Special Move. A torrent of water appears that Squirtle "surfs" on top of. The attack does multiple hits with minor knockback towards the end. It is difficult to interrupt as a recovery move, as the hitbox is large, disjointed, and directly in front of Squirtle. It is also possible that when used you can change it to move more vertical or horizontal by tilting left or right on the control stick,or pad.
Origin
Starting in Generation 2 Waterfall was an HM (Hidden Machine) that allowed a Pokémon to learn Waterfall, which when used outside of battle, allowed the player to go up waterfalls. This is necessary to get from New Bark Town to Kanto.