The landscape of the northeastern sectors of Chiloé Island is dominated by rolling hills with a mosaic of pastures, forests and cultivated fields.

It is separated from the Chilean mainland by the Chacao Strait (Canal Chacao) to the north, and by the Gulf of Ancud (Golfo de Ancud) and the Gulf of Corcovado (Golfo Corcovado) to the east; the Pacific Ocean lies to the west, and the Chonos Archipelago lies to the south, across the Boca del Guafo.

The Chilean Central Valley lies between the coastal mountains and the Andes, of which the Gulfs of Ancud and Corcovado form the southern extension.

Chiloé National Park (Parque Nacional de Chiloé) is located on the island's western shore and Tantauco Park (Parque Tantauco), a private natural reserve created and owned by Chilean business magnate and former President of Chile Sebastián Piñera, is located on the island's southern shore.

[4] Chiloé has been described by Renato Cárdenas, historian at the Chilean National Library, as "a distinct enclave, linked more to the sea than the continent, a fragile society with a strong sense of solidarity and a deep territorial attachment.

[6] Spread along the coast of Chiloé are a number of middens - ancient dumps for domestic waste, containing mollusc shells, stone tools and bonfire remains.

All of these remains indicate the presence of nomadic groups dedicated to the collection of marine creatures (clams, mussels and Choromytilus chorus, among others) and to hunting and fishing.

The original peoples navigated the treacherous waters of the Chiloé Archipelago in boats called dalcas with skill that impressed the Spaniards.

By 1767 there were already 79 and today more than 150 wooden churches built in traditional style can be found on the islands, many of these declared World Heritage Sites by UNESCO.

[16] On December 10, 2021, a wildfire spread across Chiloe, including the city of Castro, burning houses, churches and schools, and causing many residents to evacuate.

In 2013, a small airstrip was opened at the south tip of the island, allowing local flight access to the remote village of Inío.

In May 2012, President Sebastián Piñera again revived the project, announcing an international bidding process would be opened to present the best solution for the construction of the bridge, with a US$740 million investment limit.