Tutorial: Liquid Simulation in Blender

1) Create a sphere
2) Add--Mesh--Sphere
3) Switch to wireframe mode
4) Create cube, scale it up
5) Duplicate cube and scale the duplicate by the z axis and line it up with the bottom of the first cube, this will be the bounding box for your water
6) At the bottom of the window, set the end frame value to 30
7) Select the sphere, press "I" on the keyboard, and select location
8) Move the green marker on the timeline to frame 10
9) Select the sphere and move it down to center it at the water line
10) Select the sphere, press "I" on the keyboard, and select location
11) Move the green marker on the timeline to 30
12) Select the water, click on the physics tab, click on the fluid button, change Type to "Fluid"
13) Scroll through the outliner on the top right to find the cube that you previously selected, if still selected, it should be highlighted in white text
14) Click on the camera icon next to the highlighted text to prevent the cube itself from being rendered
15) Select the sphere, in the physics tab click on the Fluid button and change the type to obstacle
16) Select the bigger box, click the fluid button and change the type to domain
17) Change the resolution to 150
18) Open Fluid boundary section and set the subdivisions to 2
19) With everything set, you can hit the bake button