Supercavitation is a remarkable technology which most people have never heard of. By reducing drag on submarines and torpedoes by a factor of 60-70%, supercavitation could transform the stealthy world of submarine warfare into something more like aerial combat, with objects flying back and forth at speeds much faster than the submarines we know.
Supercavitation exploits the phenomena of cavitation, something that submarine designers usually try to avoid. It would work as follows. When the nose of a torpedo or submarine is shaped in a certain way, usually flat with sharp edges, it creates an excessive amount of drag through the water. But the design of the nose accelerates the water it moves through at quick speeds, causing it to lose pressure and vaporize into bubbles. This follows from the well-known Bernoulli's principle, which states that fluid velocity and pressure/density are related. When the velocity increases, the density drops. When the density drops below the vapor pressure of the water, the water vaporizes until it slows down enough to recondense.
By purposefully vaporizing as much water as it can, a supercavitating submarine or torpedo can create a bubble of air so large that it encompasses the whole vehicle. This is a positive feedback process - the more water is vaporized by the specially designed nose, the less drag on the vehicle, the easier it gets to move even faster and vaporize more water. The primary downside is that a supercavitating object is extremely loud. It churns water with such abandon that a shock wave would emanate out from the vehicle wherever it went. This, along with technological challenges, is the reason why supercavitating submarines have not yet been developed, although they are in the works. Supercavitating torpedoes have experienced limited use.
As with many interesting technological advancements, torpedoes exploiting supercavitation were originally developed by the Germans during WWII. Subsequently they were abandoned and taken up by the Russians. In recent years, the United States has taken a great interest in the technology, working on an "Underwater Express" program to create a supercavitating underwater battleship. Developing powerful underwater military capability is essential for national security because of the threat of nuclear submarines.