Place a preformed pond liner in the area of your property where you plan to place the stone waterfall. The pond liner is the reservoir for the waterfall and should be situated at the end of the cascade. Mark the shape of the pond liner on the ground with spray paint.
Excavate the ground within the marked paint to the depth of the pond liner. Remove any grass and clear the ground behind the area for the pond liner equal to the desired width and depth of the waterfall base. Remove all rocks and roots from the excavated areas. Place the pond liner in the hole; the rim of the liner should be level with the ground.
Mix mortar according to the package directions. Apply a thin layer of mortar around the perimeter of the pond liner. Place medium-sized river rocks in the mortar as you go, creating a natural border for the waterfall reservoir.
Spread a thin layer of mortar mix on the excavated ground immediately behind the pond liner. Place a row of medium-sized river rocks in the mortar along the edge of the pond liner.
Work backward from the pond liner and spread another thin layer of mortar mix behind the first row of river rocks. Place the largest river rocks in the mortar. Continue working backward to build the base of the waterfall with large river rocks.
Spread a thin layer of mortar on top of the large row of river rocks directly behind the first row of medium-sized stones. Place medium-sized stones into the mortar. Work backward, covering the large stones on the first layer with mortar, and then placing medium-sized stones in the mortar. Fill in any large gaps with small river rocks.
Build the waterfall by successively mortaring and stacking medium-sized stones. Begin each level by leaving the front rows open; stacking the stones from the second row back. Fill in any gaps with small river rocks. Allow the mortar to dry.
Place the submersible waterfall pump inside the pond liner. Attach a length of plastic tubing to the pump. Run the tubing around the side and up the back of the waterfall to the top. Tape the tubing in place on the backside of the waterfall with duct tape. Camouflage the tubing on top of the waterfall with small river rocks, and glue the small stones in place with waterproof construction adhesive. Fill the pond liner with water.