Wetsuits are typically made out of an insulating, rubber-like substance called neoprene and they are designed to fit snuggly (but not too tight). When a diver first jumps into the ocean, a small amount of water will seep in and form a layer of water between the diver's skin and the neoprene wetsuit. The diver's body will warm that water to nearly body-temperature. Because the wetsuit fits snuggly, that water does not circulate with the ocean water, it stays against the skin forming a warm insulating layer between the diver and the ocean.
It should be noted that wetsuits are not appropriate for diving in all climates as they will only keep a diver so warm. Another kind of suit called a Dry Suit is worn for dives in very cold water, and these suits are much warmer. The use of dry suits requires additional training, however, to learn how to handle the additional buoyancy of the air in the suit.
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The wetsuit is made out of closed-cell foam neoprene rubber. That makes it difficult for water to flow in and out of a properly fitted wetsuit except for through the zipper, neck opening and cuffs. Once the cold water enters the wetsuit, your body heats it up. The foam serves to insulate that warm water and that warm water stays warm.
Wetsuits slow heat loss underwater by trapping a thin layer of water against a diver's body. While the diver still gets wet, their body rapidly heats up the thin layer of water trapped against their body to nearly body temperature. If the suit fits properly, the warm layer of water does not circulate away from the diver's body. The warm layer of body temperature water conducts less heat away from the diver than the cooler surrounding water, which keeps the diver warmer than they otherwise would be.
Your body warms a thin layer of water that is trapped between your body and the wetsuit, The foam of wetsuit acts as insulation to help thermal loss.
They keep us warm by creating a thin layer of water against your skin. Your body heat warms up this thin layer keeping you warm!