A portable electronic device may include submersion detection circuitry for detecting when the electronic device is submerged in water or other liquids. The submersion detection circuitry may include a barometric pressure sensor that gathers air pressure information. Control circuitry in the electronic device may monitor the air pressure sensor for sharp changes in air pressure indicating that the electronic device has been dropped or submerged in water. Various actions may be taken in response to determining that the electronic device is in water. If the electronic device is not intended to operate underwater, a power management unit may automatically power down electrical components in the electronic device in response to determining that the electronic device is in water. If the electronic device is intended to operate underwater, control circuitry may determine and track a water depth level at which the electronic device is submerged based on the air pressure information.