The Portuguese Water Dog's coat is very thick. It grows evenly over the dog's entire body, with the exception of the groin area and the area where the front legs join the body: here the coat is slightly thinner. The hairs themselves are thick as well. The Portuguese Water Dog only has one coat, unlike other breeds which have an undercoat also. The coat can be either curly or wavy, and both types are acceptable for the American Kennel Club (AKC) breed standard.
The curly haired coat of the Portuguese Water Dog closely resembles the coat of the Standard Poodle, and indeed the Standard Poodle is a close relative of the Portuguese Water Dog. However, the Portuguese Water Dog's coat is not as curly as that of the Standard Poodle. The hairs are tightly curled, forming cylindrical shapes. The hair is not shiny in the curly coated dogs. For wavy coated Portuguese Water Dogs, the hair is not as tightly curled, forming more of a wave pattern in the hair. The coat is usually quite shiny for this type of hair.
According to the acceptable breed standard for the Portuguese Water Dog as is stated by the AKC, the dog can have one of two grooming cuts: the lion cut or the retriever cut. The lion cut requires long hair on the dog, but it is clipped short on the dog's hindquarters, muzzle, and the base of its tail, giving it the appearance of a lion. The lion cut is in some ways responsible for the name of the dog itself, which was once called the Lion Dog in Portugal because of the cut. The reason for the lion cut was to free up the dog's hind legs for swimming when it worked as a fishing dog in Portugal. The hair was left long on the rest of the body to keep the dog warm in cold waters. The retriever cut is much more basic: the coat is clipped to about one inch in length over the dog's entire body, with the exception of the tail, which is kept long.
The Portuguese Water Dog's coat can come in white, black, or brown, or can have white markings within a solid dark color. In order to be shown in an AKC dog show, the Portuguese Water Dog with white markings must have only a relatively small percentage of the body marked with white.
The most interesting part about the Portuguese Water Dog's coat is that it does not shed and it is hypoallergenic. The lack of shedding is essentially what makes the dog hypoallergenic. This is another aspect of the dog that closely mirrors the breed's Standard Poodle ancestry.