Water Town is the main setting for the events of Volume 2.
Water Town is a bright, white city of stone in the middle of a large lake. Several causeways let foot and wagon traffic enter the city. The Temple of Law lays on the outskirts of Water Town, where Sword Maiden resides. Water Town boasts numerous canals within, which are used by boats for transportation. Under the city lies catacombs and caves, which were inhabited by goblins.
Goblin Slayer's party learned that women in the town had been the targets of violent murder on the streets; after an adventurer managed to save a woman from being attacked, a goblin was found to be one of the attackers. This prompted the adventurers to investigate the city's catacombs, where they later fought numerous goblins, a goblin champion and an agent of chaos.
Goblin Slayer's party returned to Water Town to deliver several clay tablets to Sword Maiden for safekeeping. While Goblin Slayer went to deliver the tablets, the girls, along with Cow Girl and Guild Girl toured the city.