In accordance with the present invention there is provided a cooling system for a four-cycle engine utilized to power a water propulsion device of a watercraft of the type including a propulsion passage having an inlet in the bottom of the hull and an outlet at the stern of the watercraft. In a first embodiment, coolant is delivered from the propulsion passage to an exhaust manifold cooling jacket, then to at least one passage extending through the engine and then an exhaust pipe cooling jacket. As an additional aspect of the invention, coolant is provided to an oil cooler for cooling lubricating oil used to lubricate the engine. In another embodiment of the present invention, an exhaust cooling system is provided for the four-cycle engine powering the watercraft, separate from the cooling system for the cylinder block and cylinder head of the engine. Coolant is supplied through cooling jackets provided along substantially the length of the exhaust system from the engine to a discharge from the watercraft.