At the time of its dissolution, the municipality of Øyestad encompassed most of the coastline between the towns of Grimstad and Arendal, along with the forested areas along the Nidelva river heading inland.

On 1 January 1875, an area of the neighboring town of Arendal (population: 52) was transferred to Øyestad.

In 1936, an area of Øyestad (population: 33) was transferred to neighboring Austre Moland municipality.

On 1 January 1962, the uninhabited area of Salvestjønn was transferred from Øyestad to the neighboring municipality of Landvik.

[5][4] The municipality (originally the parish) is named after the old Øiestad farm (Old Norse: Øyjarsstaðir) since the first Øyestad Church was built there.

The official blazon is "Argent, a pile issuant from base sinister wavy azure" (Norwegian: I sølv en skråstilt blå spiss dannet ved bølgesnitt).

The charge is a pile (triangular figure) with wavy edges that runs diagonally across the arms.

The design is meant to represent the local river Nidelva as it runs from the mountains into the fjord as it passes through the municipality as it widens as it approaches the sea.

[11] The municipal council (Kommunestyre) of Øyestad was made up of 33 representatives that were elected to four year terms.