The undershot wheel is probably the oldest type of waterwheel, having been developed over two thousand years ago. Mounted vertically on a horizontal axle, it has flat boards, called floats, mounted radially around the rim. It is turned by the impact of water striking these float boards as it flows under the wheel.

Undershot wheels are not very efficient, but they are fairly simple to build and can be placed into a rapidly flowing stream with a minimum of site preparation. When placed in a carefully channeled raceway, however, their efficiency increases somewhat. Small diameter undershot wheels, known as flutter wheels, can run at over 100 revolutions per minute and were the most common type of wheels to run the thousands of "up and down" sawmills that built early America.