This paper presents a comprehensive study of dynamics identification‐driven diving control for unmanned underwater vehicles (UUVs). Initially, a diving dynamics model of UUVs is established, serving as the foundation for the development of subsequent algorithms. A noise‐reduction least squares (NRLS) algorithm is then derived for parameter identification, demonstrating convergence under measurement noise from a probabilistic perspective. A notable feature of this algorithm is its skill in correcting raw data, thereby improving parameter identification accuracy. Based on the identified model, an improved fast terminal sliding mode control (FTSMC) algorithm is introduced for diving control, consistently ensuring rapid convergence under 16 scenarios. Importantly, the proposed diving control algorithm effectively mitigates chattering by incorporating a dedicated filter, adaptively adjusting the switching gain, and substituting saturation function for sign function. Through experimental validation, the NRLS algorithm's advantage over the traditional least squares method becomes evident, with depth errors consistently below 3.5 cm. This indicates that the identified model closely aligns with the actual model, showcasing a commendable fit. Additionally, when compared to the traditional sliding mode controller and the proportional‐integral‐derivative algorithm, the FTSMC algorithm has superior performance, as indicated by a mean absolute percentage error consistently below 4%.