Altitude

Altitude is commonly expressed as a number defining the distance in layers above the base of the game environment, which is layer zero (0). Sea level is recognized as layer 62 (i.e. altitude 63), and the top of the game environment is layer 255 (i.e. altitude 256). Clouds appear halfway between the two at layer 127.

More specifically, the bottom face of the bottom most bedrock block is at Y-coordinate 0, and the top face of the highest block that can be placed is at Y-coordinate 256. The player can press F3 to see the Y-coordinate of the top face of the block on which they are standing or of their eyes, with the player's eyes located about 1.6 blocks above the layer on which the player is standing. For example, a player standing on a shore of an ocean will see the Y-coordinate of their eyes as approximately 64.6.

Natural resources and altitude
Features in the landscape of the Overworld are found at different altitudes, as shown in this graph.



There is also an interactive chart. Beware the logarithmic scale: a slight difference in the Y-coordinate means a large change in relative frequency of this block type. Some observations:
 * Looking at water, the ocean level at layer 62 is obvious. Going down, the amount decreases more quickly at layers 56 and 48, the usual depth of river and ocean biomes respectively. There are corresponding peaks in the amount of clay beneath them. (Note that clay can occasionally be generated even in high-altitude lakes.) Between layers 33 and 12, most water is falling down sub-ocean ravines, spreading out on the lava-filled bottom at layer 10 and producing most of the naturally-occurring obsidian.
 * Ores and gravel (not shown) usually occur as a fixed percentage of the amount of stone (also not shown), tapering off at the ends of their allowed range. This is why coal and iron follow parallel tracks between layers 5 and 60.
 * The one exception is lapis lazuli ore, which has a linear progression up to a peak at layers 13-14.

See the following table for a textual description of resources by altitude and tools needed to gather them.

Other naturally occurring features appear at different altitudes such as grass, wood, flowers, mushrooms, clay, cobblestone, sugar cane and Obsidian, but all of these features are random and will only appear in conjunction with another block and the proper environment.

The Nether
A similar graph, showing the distribution of blocks unique to the Nether:



Pocket Edition
The height limit on Pocket Edition is half as much as the computer version (identical to the height limit before the Anvil file format).

The Nether Reactor
Nether Spire is a room which is a size of 7x17x17 ''Note: Spawning Items is spawned Layers 3-7.

Trivia

 * The Beta 1.6 update made it impossible for players to place blocks on the uppermost layer of the map (Y=127).
 * A similar darkening can be found on the highest layer that can be built on.
 * Although the highest possible altitude the player can climb normally is Y=257 (door "glitch" + jumping), a TNT cannon can blast the player many layers past the sky limit.
 * Going under Y=-64 in the Void will cause the player to receive damage very quickly, killing him/her. Also, this is the only way to die in Creative mode (except the /kill command).
 * Although blocks cannot normally be placed past Y=254, there are several exceptions:
 * Beds, along with other non-solid blocks (Signs, Torches) can be placed on the 255th layer. Also, if a door is placed 1 layer below the top of the map, its upper frame will pass the 254th mark.
 * By placing a water source block on layer 255 using a Water Bucket on a solid block on layer 254, then placing a lava source block on the water using a Lava Bucket, both Cobblestone and Obsidian can be created on layer 255. The opposite (placing water on lava) works as well.
 * Placing a rail, flat snow, etc. block on the 255th layer, then trying to place a block on it will give you the message: Height limit for building is 256. This also applies when trying to place a block on top of a solid block at layer 255 (using MCEdit, or water and lava).
 * Notch, on his Twitter feed before the Adventure Update, posted a picture showing his experimentation with height limits and terrain generation up to 512, featuring a mountain much higher than normal mountains. The height limit was eventually increased to 256 in 1.2.1, though landforms did not yet generate above layer 127.
 * The maximum height (coordinates) a player can reach is displayed as "Infinity".
 * The highest achievable height in Xbox Edition is y=511.
 * The Nether Reactor has a height limit. Attempting to build it too high will result in the game scolding you and saying "The nether reactor needs to be built lower down".
 * If you go much above the 255th layer while it is raining the rain will change into snow, giving evidence that some of Minecraft is based on real life science.

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