Q690E high strength low alloy (HSLA) steel plays an important role in offshore structures. In addition, underwater local cavity welding (ULCW) technique was widely used to repair important offshore constructions. However, the high cooling rate of ULCW joints results in bad welding quality compared with underwater dry welding (UDW) joints. Q690E high strength low alloy steels were welded by multi-pass UDW and ULCW techniques, to study the microstructural evolution and mechanical properties of underwater welded joints. The microstructure and fracture morphology of welded joints were observed by scanning electron microscope and optical microscope. The elemental distribution in the microstructure was determined with an Electron Probe Microanalyzer. The results indicated that the microstructure of both two welded joints was similar. However, martensite and martensite-austenite components were significantly different with different underwater welding methods such that the micro-hardness of the HAZ and FZ in the ULCW specimen was higher than that of the corresponding regions in UDW joint. The yield strength and ultimate tensile strength of the ULCW specimen are 109 MPa lower and 77 MPa lower, respectively, than those of the UDW joint. The impact toughness of the UDW joint was superior to those of the ULCW joint.