Underwater blasting vibration poses significant challenges in mining engineering applications, particularly channel dredging, seaport, and bridge construction. This study investigates the vibration attenuation mechanism and propagation characteristics through damping borehole configurations. The attenuation law of underwater blasting damping holes was studied, and a comprehensive experimental program to analyze the blasting vibration signals and piezoelectric signals was conducted by comparing three scenarios: conventional blasting without damping measures, water-coupled damping holes, and air-coupled damping holes. The optimized borehole parameters included a 2 cm diameter, 5 cm spacing, 4 cm row spacing, and 17 cm depth, positioned 20 cm from the explosive source. Experimental results demonstrated that using underwater blasting damping holes can effectively reduce the peak vibration velocity of blasting. The average damping rate of water-coupled damping holes and air-coupled damping holes is 17.5% and 27.2%, respectively. Time domain analysis revealed a consistent correlation between piezoelectric signals and the peak vibration velocity. The damping mechanism primarily affected vertical vibration components, with effectiveness positively correlated with charge weight. Field validation tests confirmed an 18.1% vibration reduction, establishing the practical efficacy of the proposed damping borehole array.