Often considered the group's signature song, "Waterfalls" was an international hit, topping the charts in many different territories. The song spent seven weeks at number one on the Billboard Hot 100, giving the group their second US number one. The song was the number two song of the year on the Billboard 1995 year-end chart. "Waterfalls" also peaked at number one in New Zealand, Switzerland, and Germany, while reaching the top ten in many other countries. "Waterfalls" received critical acclaim, earning two Grammy nominations at the 38th Annual Grammy Awards in 1996 for Record of the Year and Best Pop Performance by a Duo or Group with Vocal.
The song tackled issues of the illegal drug trade, promiscuity and HIV/AIDS. Jarett E. Nolan of BMG noted that "Waterfalls" was the first number one song ever to reference AIDS in one of its verses. The accompanying music video for the song reflected its socially conscious lyrics. With a million-dollar budget, the video was an MTV staple credited for giving the single much of its success. It stayed atop the MTV Video Monitor chart for over a month, making TLC the first act to ever achieve this feat. The video won four MTV Video Music Awards in 1995, including top honors for Video of the Year. TLC was the first African American group or artist to ever receive the trophy.
"Waterfalls" is an R&B song, written by TLC band member Lisa "Left Eye" Lopes with Marqueze Etheridge and Organized Noize, who also produced the song. Rozonda "Chilli" Thomas and Tionne "T-Boz" Watkins perform the song with Lopes, who also provides a rap. The background vocals are performed by the members of TLC, as well as Debra Killings and Cee-Lo Green. Of Green's involvement, Watkins noted, "He was in Goodie Mob, we grew up together, we go way back. He (sang on the track) and it was amazing! I love his voice."
The lyrics of the song reference 1990s issues such as the HIV/AIDS epidemic and violence associated with the illegal drug trade. Watkins said that it was important for the group to "get the message across without seeming like preaching."
The music video was directed by F. Gary Gray and features Ella Joyce, Bokeem Woodbine, Shyheim, Paul J. Alessi and Gabrielle Bramford. TLC had to force Antonio L.A. Reid to get the budget for the music video, which was filmed at Universal Studios Hollywood from June 8–9, 1995.