Lava

Lava is a liquid block that was added in the Lava Update. It damages any player coming into contact with it

Lava also deals damage to the passive mobs that spawn on your island; however, the drops may get incinerated if you are not close by.

Lava can only be collected with a metal bucket, presumably because lava burns wood. Clicking on lava pools or placed lava collects the lava, decreasing its level or removing it, respectively. This turns the metal bucket into a lava bucket, which you can now use to place lava.

In contact with flowing water, flowing lava turns into cobblestone. This concept can be used to create an infinite cobblestone generator.

Lava can be found at the bottom of Ragpine Caves and a cave near the entrance to Shatter Rock Canyon.