Within an average depth of 40 metres (130 ft), the bay has been of historical importance to the island; since the 15th century, it was a port-of-call for returning merchant shipping from the East Indies and Brazil, laden with gold, silver, porcelain, spices, rare woods, and other goods.

This role helped the establishment of a protective fleet, called the "Armada of the Islands" by King Manuel I, and ordered special rules for "...for ships from India in the Azores and the institution of arbiters of customs..." (or maritime magistrates), both in 1520.

Geological evidence points to the bay being formed by basaltic lavas, much eroded and covered by pyroclastic surges, tuffs of palagonite-like matter, material formed by the interaction of molten basalt and cold seawater, and consolidated volcanic ash ejected from vents during volcanic eruptions, all from the volcano that helped define the bay itself, the looming presence called Monte Brasil.

On top of these volcanic layers are sedimentary materials, sometimes of great thickness, formed mainly of sand, pebbles, and large blocks of rolled palagonite with abundant cavities.

This bay, given its origin, has quite a diverse morphology, presenting sandbars, vertical walls (some more than 40 metres high), large blocks, fields of small and medium stones, caves, pebbles scattered on sandy bottoms, etc.