Instructions
Visit the Lake Hylia fishing hole. To get to the fishing hole as a child, Link will need to have access to Lake Hylia. Access is automatically given as the story progresses. To access the fishing hole as adult Link, you will need to either have completed the Water Temple dungeon or have the "Scarecrow Song's" and the hook shot. As adult Link, you will need to play the "Scarecrow's Song" in front of a group of scarecrows, located near the upper-right area of the map. Once the song has been played, use the hook shot on the scarecrow that pops up near the fishing hole.
Speak to the NPC (non-playable character) inside the fishing hole and inform him you wish to fish. Note that it costs 20 rupees to fish, however, you may fish for an unlimited amount of time. If you leave the fishing hole and re-enter, you will be required to pay the fee again.
Catch a 10-pound fish as child Link or a 15-pound fish as adult Link to unlock the sinking lure. To catch the Hylian Loach you will need to use the sinking lure, which you can get from the NPC after catching a fish.
Look for the Hylian Loach within the fishing hole. It is not always present in the fishing hole, so locate it before you fish. If you are unable to find the large eel-like fish, exit the fishing hole and re-enter. There is a one-in-four chance the Hylian Loach will be present.
Use the sinking lure within the fishing hole as adult Link once you have located the Hylian Loach. The Hylian Loach is a large fish and can only be caught by adult Link. Make sure to cast your line near the fish as you will be more likely to catch it when the lure is nearby. Wait until the Hylian Loach grabs your line and repeatedly press "A" to reel him in. Once he has been caught, speak to the NPC on duty and choose the "Let's talk about something" dialogue. He will weigh the fish and reward you with 50 rupees.