Generation of underwater cavities requires rapid expansion of a gaseous volume, which may be achieved via the exothermic reactions of nanoenergetics. This work reports first the formation of combustion-induced vaporous cavitation and its dynamics. A superhydrophobic, stearic acid (SA)-coated, core-shell nanocomposite was developed to address the challenges associated with the high hydrophilicity of metallic nanoparticles and the subsequent deactivation of aluminum by water, which hinders ignition and flame propagation. With 1% SA, Al@CuO@SA combusted violently, achieving a maximum cavity volume above 25 mL and a cavity growth rate of up to 13 L/s using only 20 mg of material. 5% SA allowed Al@CuO@SA to stay submerged for 2 weeks and retain excellent reactivity. The combustion performance was tuned by adjusting the sample composition to control the reactivity and the material properties of the nanoenergetics. The rates of cavity growth and decay were investigated using high-speed imaging and analyzed in a nondimensional analysis to demonstrate the key characteristics of combustion-induced cavitation. It was observed that the cavity generation process occurs across several stages including SA decomposition around 300 °C, creating a small bubble surrounding the sample, which reduces heat loss to water and promotes the thermite reaction, and the exothermic reaction at 600 °C, resulting in the formation and rapid growth of the major cavity. Thermal analyses during controlled heating and during combustion provided insights into the reaction mechanisms.