Adult sand fiddler crabs, Uca pugilator, forage in large herds on exposed sediment during low tide. These herds form as a response to optimal foraging conditions but may have an additional benefit of water conservation. We determined water loss rates for crabs in groups of different sizes. Crabs in groups of 10 and 20, but not in a group of 5 or isolated individuals, showed a water-conserving group effect, yielding nearly a two-fold decrease in water loss rates. Other characteristics of U. pugilator (water content, dehydration tolerance, activation energies for water loss, critical transition temperature, and critical equilibrium humidity) are consistent with a hydrophilic water balance profile. Because crabs did not replenish water supplies from water vapor like some terrestrial arthropods, water conservation is vital to crab survival outside burrows. Enhanced water retention generated by herding likely permits more time for feeding outside the burrow, while also increasing feeding efficiency by minimizing frequency of water uptake. The fact that U. pugilator is semiterrestrial suggests that a reduction in water loss due to group effects may provide a mechanism for terrestrialization.