Data from an underwater continuous wave signal are analyzed using methods derived from the study of chaotic systems. Distortions by the environment effectively add three degrees of freedom (dimensions) to the signal. The dimension required to reconstruct and analyze the received data is five in contrast to a pure tonal or sine wave that only requires two dimensions. The data are examined with a chaotic data analysis toolkit that includes determination of degrees of freedom using local and global false‐nearest‐neighbor statistics, average mutual information, correlation dimension, and local Lyapunov exponents. These results are important for the development of methods for correction of propagation distortions and nonlinear noise reduction algorithms. Application of this knowledge should lead to improvements in the detection and classification of underwater signals.