A waterfall for a portable spa does not take up any seat space by being set into the top rim of the spa. Water from the spa circulation system flows into a closed end of a channel located in the top rim and along the channel to the open end located at the edge of the top rim on the inside wall to fall into the body of water in the spa. A light source at the point where the water enters the closed end of the channel, which may be adapted to change colors, directs light into the water flow, lighting the water that falls into the spa, in different colors, as desired.
