Collapse pits and an associated suite of collapse‐related features that form in submarine lava flows are ubiquitous on the global mid‐ocean ridge crest. Collapse pits, the lava tube systems they expose, and lenses of talus created by the collapse process combine to produce a permeable region in the shallow ocean crust and are thought to contribute significantly to the 100–300 m thick low velocity zone observed at intermediate to fast‐spreading mid‐ocean ridges. This horizon of low‐density, high‐porosity material is likely to be an important aquifer for the transfer of hydrothermal fluids in the upper ocean crust. In a recent survey of the East Pacific Rise at 9°37′N, we used photographs, video and observations from the submersible Alvin, and DSL‐120A side scan data to determine that 13% of the 720,000 m2 of seafloor imaged had foundered to form collapse pits. In 98% of the images collapse pits occurred in lobate flows, and the rest in sheet flows. On the basis of our observations and analyses of collapse features, and incorporating data from previous models for collapse formation plus laboratory and theoretical models of basalt lava behavior in the deep ocean, we develop a detailed multistage physical model for collapse formation in the deep ocean. In our model, lava extruded on the seafloor traps pockets of seawater beneath the flow that are instantly vaporized to a briny steam. The seawater is transformed to vapor at temperatures above 480°C with a 20 times expansion in volume. Bubbles of vapor rise through the lava and concentrate below the chilled upper crust of the lava flow, creating gas‐filled cavities at magmatic temperatures. Fluid lava from the cavity roofs drips into the vapor pockets to create delicate drip and septa structures, a process that may be enhanced by water vapor diffusing into the magma and reducing its melting point. As the vapor pocket cools, the pressure within it drops, causing a pressure gradient to develop across the upper crust. The pressure gradient often causes the roof crust to collapse during cooling, though vapor pocket geometry may be such that the roof remains intact during subsidence of the underlying lava. Alternatively, drainaway of the molten lava may cause collapse in locations where inflated lava roof crusts are not supported from below by bounding walls or lava pillars. Post‐eruption seismicity, lava movement, or hydrovolcanic explosions may cause continued collapse of the lava carapace after the eruption.