The islet straddles the maritime border of the Australian states of Victoria and Tasmania, hence the name.

[1] Boundary Islet is divided in the east–west direction at the latitude 39°12′ S, with the northern portion belonging to Victoria and the southern portion belonging to Tasmania.

[2] This situation is accidental, and arose as a result of an error made by Captain John Black, who surveyed the position of the islet in 1801 and determined its latitude to be slightly farther north than it truly is.

The boundary between Victoria and Tasmania was later set along the latitude of 39°12′ S, which was then thought to be completely south of Boundary Islet and not to traverse any land in Bass Strait.

However, when Boundary Islet's correct latitude was later determined it was found to straddle the border.