Mine water inrush stays as one of the major disasters in coalmine production and construction. As one of the principal methods for detecting hidden water-rich areas in coal mines, underground transient electromagnetic method (TEM) adopts the small loop of a magnetic source which generates a kind of whole-space transient electromagnetic field. To study the diffusion of whole-space transient electromagnetic field, a 3-D finite-difference time-domain (FDTD) is employed in simulating the diffusion pattern of whole-space transient electromagnetic field created by the magnetic source in any direction and the whole-space transient electromagnetic response of the 3-D low-resistance body. The simulation results indicate that the diffusion of whole-space transient electromagnetic field is different from ground half-space and that it does not conform to the "smoke ring effect'' of half-space transient electromagnetic field, for the radius of the electric field's contour ring in whole space keeps expanding without moving upward or downward. The low-resistance body can significantly affect the diffusion of transient electromagnetic field. When the excitation direction is consistent with the bearing of the low-resistance body, the coupling between the transient electromagnetic field and the low-resistance body is optimal, and the abnormal response is most obvious. The bearing of the low-resistance body can be distinguished by comparing the response information of different excitation directions. Based on the results above, multi-directional sector detection technology is adapted to detect the water-rich areas, which can not only detect the target ahead of the roadway but also distinguish the bearing of the target. Both numerical simulation and practical application in underground indicate that the mining TEM can accurately reflect the location of water-rich areas.