The International Hydrographic Organization (IHO) defines the Banda Sea as being one of the waters of the East Indian Archipelago.

Fore-arc sediments progressively carried northwards by the Indo-Australian plate have been folded and faulted forming Timor island.

To the northeast lies Seram Island which overlies the subduction of the Bird's Head plate of West Papua.

The northern islands of Sulawesi, Buru, and Seram constitute separate tropical moist forest ecoregions.

The islands south of the Banda Sea are among the driest in Indonesia, and are home to tropical dry forests.

There are only twenty-two native mammals on these islands, including the rare dusky pademelon (Thylogale brunii) and Indonesian tomb bat (Taphozous achates), and the endangered endemic Kei myotis bat (Myotis stalkeri).

Yamdena in the Tanimbar Islands is an example of a large and fairly unspoilt habitat and is a protected area.

The Banda and Kai Islands, although remote, are visited by tourists for snorkelling and for their unspoilt beaches.