Castel Bay is a Canadian Arctic waterway in the Northwest Territories.

It is a southern arm of M'Clure Strait on northeast Banks Island.

The mouth of the larger Mercy Bay is less than 20 km (12 mi) to the east.These bays are a part of Aulavik National Park.

It is named by Vilhjalmur Stefansson in honour of Arctic explorer Aarnout Castel.

This Canadian Northwest Territories location article is a stub.