Health

The health and damage system in minecraft is based on a simple heart system. Each heart contains halves. All player characters and hostile mobs have 10 hearts at full health, and 0 at death. Pigs, sheep, and cows all have 5 hearts, whilst chickens have 2 hearts. Players and NPCs can do damage by hitting each other with items at close range. The large majority of items only do ½ a heart of damage. Certain items can be crafted for the explicit purpose of dealing more damage. Swords are the main and simplest item to use and make. Swords still require melee range, but deal significantly more damage per hit.
 * Wooden Sword: 2 hearts/hit
 * Stone Sword: 3 hearts/hit
 * Iron Sword: 4 hearts/hit
 * Diamond Sword: 5 hearts/hit

Besides swords, there are several other unique items that can be used to deal extra damage. Arrows for example, that must be shot using right click with a bow, are the only ranged weapon in the game. Flint&steel is an item that allows the player to light a block on fire, which causes all players and mobs that walk over the block to be caught on fire. Players and mobs that are caught on fire by the flint&steel stay on fire for 15 hits, or until they touch water. Like Flint and Steel, a bucket of lava also catches enemies on fire. Lastly, TNT is currently the only explosive weapon in Minecraft and is consequentially quite hard to obtain.
 * Arrows: 2 hearts/hit
 * Flint&steel: ½ heart/hit, 1 heart/hit if the player/mob is standing on the flaming block
 * Bucket of Lava: 5 hearts/hit while player/mob is in lava ½ heart/hit from afterburn.
 * TNT: 12 hearts/hit (point blank), equivalent to a Creeper explosion on hard difficulty.

Mob's Damage
Unlike player character's damage, the damage mobs do is effected by the difficulty the player is on.

Easy

Zombie: 1½ hearts/hit

Spider: ½ heart/hit

Skeleton: 1 heart/hit

Creeper: 5½ hearts/hit (point blank)

Normal

Zombie: 2½ hearts/hit

Spider: 1 heart/hit

Skeleton: 2 hearts/hit

Creeper: 8 hearts/hit (point blank)

Hard

Zombie: 3½ hearts/hit

Spider: 1½ hearts/hit

Skeleton: 3 hearts/hit

Creeper: 10½ hearts/hit (point blank)

Natural Damage
Besides mobs, players can take damage from several other events in Minecraft.

Fall Damage
In indev, infdev, and Alpha mode, you receive damage when falling from certain heights. The amount of damage received depends on the total height of a drop, and it is possible for a player to die upon falling to the ground.

Fall damage can be calculated using this formula: FD=(number of blocks x .5) - 1.5

Mobs other than chickens suffer fall damage as well.

It is possible to avoid falling, or to survive a fall. Falling damage is only dealt after a height of three blocks. Falls equal to or larger than 23 blocks result in an instant death.


 * Using sneak (default LSHIFT) will prevent you from falling off any ledge in most situations.
 * Having at least .5 units of armor will save your life from maximum-point falls.
 * Landing in water deeper than two blocks. If less, then you will still take damage.
 * Move neutral mobs away to avoid an unpleasant push to your death.
 * Riding in a minecart will allow you to leave the scene unhurt.
 * You do not sustain any fall damage while you're on fire.
 * Jumping counts as falling for 1.5 blocks, so keep this in mind when trying to avoid fall damage.

Drowning
Once your air runs out underwater, you will take approximately ½ heart damage/sec. This does not commonly happen to mobs because they automatically float upwards.

Suffocation
Occurs when the player's head is somehow inside of solid blocks, most commonly if sand or gravel falls on him. Approximately ½ heart damage/sec.

Cacti
Touching cacti will cause a player/mob to take ½ heart damage, and rapidly continue taking damage if the player/mob stands next to it.

Lava
By far the most dangerous natural occurrence, players/mobs will take damage extremely fast, and stay on fire even if they exit the lava. If players do not have a water source available they will die quickly.

Damage Immunity
After sustaining damage from any source, a mob will turn red in color for a short period of time. During this period, any other incoming damage will not be counted against the mob's total health. For instance, if you attack a mob with a bow without letting go of the mouse button, the bow's rate of fire will exceed the mob's allowable rate of incoming damage, and several of the shots will not damage the mob even if they land. Arrows that don't deal damage to a mob are reflected off of it onto the ground, and possibly, from a close range, back at the player resulting in damage. Players are also subject to damage immunity.

Trivia

 * A bucket of lava is arguably the most efficient weapon in the game, as it doesn't use up durability, does very fast damage, and slows enemies in their tracks. The only downside is that a large amount of the time the mob's drop will be disintegrated in the lava.