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Pools of this black tar-like substance appear in numbers in the Land of Darkness. The Wyvern showed the ability to exude the substance from its skin. When droplets of the substance impacted the ground, lesser forms of Grimm, including Creeps, Beowolves, Sabyrs, and Ursai rose from the black liquid.
While being exposed to a small amount of it isn't harmful, the substance is deadly to Humans and Faunus in large amounts. In the case of The Hound, most of the host's skin and muscle tissue was destroyed because of it.
In the present, the pools in the Land of Darkness are smaller than they were in the age of the Gods.
The liquid is first seen in "Battle of Beacon" when the Wyvern secreted some of it. When it hit the ground, many Grimm spawned from it.
In "The Lost Fable" it is revealed that the God of Darkness resided in a pool of Grimm Liquid before leaving Remnant. It was also shown that the pools were larger than they were in the present. Salem threw herself in the pool in her last attempt at taking her life, but as she was immortal it instead transformed her into the being of darkness that she is now.
When Salem arrived in the Kingdom of Atlas, she had Monstra spew a massive amount of Grimm Liquid from it's mouth to create an entire river of the substance to easily infiltrate the capital city. At the end of "Fault", the tundra of Solitas was shown to be cracking open, which later in "Amity" revealed the entire river of Grimm Liquid headed for the city of Mantle.
In "Midnight", the Grimm Liquid erupted from the river as geysers and sent it underneath the city of Atlas. Multiple Centinels spawned from the liquid and burrowed into the areas surrounding the city's Hard-Light shield generators, disabling one of them and shutting down the rest. This allowed Salem to land Monstra on the island and begin her invasion of Atlas.
- In a deleted concept for Volume 1, Corsac and Fennec Albain would have used the Grimm Liquid to summon Grimm in the Beacon Academy Initiation.
- According to The World of RWBY: The Official Companion, a deleted concept states the Grimm essence could be bottled up in vials, and later sold to the black market, in which one could "Grimm-ify" animals as well as merge them together into a blasphemous hybrid. 
- The concept of a Grimm hybrid may have inspired the creation of The Hound.
- During the development of Volume 8, the river of Grimm was originally going to be a much bigger part of the story before being scaled back. The scene at the Happy Huntresses camp in "Refuge" was originally intended to set up many plot elements from this that were later cut, such as the "Pillar of Grimm" miniboss that was going to be fought by the heroes.
- In "Amity", when Yang's Group discover the river of Grimm Liquid, Yang Xiao Long calls it a "river of Grimm". This seems to imply that the liquid may be an extension of the Creatures of Grimm.
- It is unknown why the Grimm Liquid pools in the Land of Darkness are smaller than they were in the age of the Gods.