It is located in an agricultural district where the main economic activities are cereal growing (mainly wheat and barley) and sheep grazing, and most of the district's small population live on surrounding farms.

The town of Karkoo itself has only a few residences and facilities, which include a district hall and Country Fire Service brigade.

[6] It closed at the end of the 2010 school year due to low student numbers.

[8] Karkoo is connected with Port Lincoln to the south and Lock to the north by the Tod Highway and by the narrow gauge Eyre Peninsula Railway.

The bounded locality of Karkoo surrounding the town includes the Shannon Conservation Park in its northwestern corner.