The island lies 46 nautical miles (85 km; 53 mi) north-east of Bundaberg and covers an area of approximately 45 hectares (110 acres).

The island is home to a small eco resort and an airstrip, which is serviced daily by flights from Bundaberg, Hervey Bay, Brisbane and the Gold Coast.

[1] The island is particularly renowned for its scuba diving and snorkelling, as its location far offshore at the southern end of the Great Barrier Reef results in excellent water clarity.

[2] Typically these type of cays are too narrow to retain fresh water or too mobile for vegetation to take hold.

Lady Elliot Island is just north of Hervey Bay, a popular humpback whale resting ground along their migration route.

[8] The Capricorn silvereye, a small bird endemic to the southern Great Barrier Reef, is found on the island, which is also home to the buff-banded rail.

[10] The existence of concentric shingle ridges across the island provides evidence of its formation by progradation over several millennia as deposits were laid down during episodic storms.

[12][13] In 1816, the island was officially discovered and named by Captain Thomas Stewart aboard the vessel Lady Elliot.

[18] The ship was probably named after Anna Maria Elliot, the wife of Gilbert Elliot-Murray-Kynynmound, 1st Earl of Minto, a Scottish politician who was Governor-General of India between 1807 and 1813.

[19] An alternative story suggests that it was named after Margaret, wife of Gilbert's brother, Hugh Elliot, a diplomat and Governor of Madras from September 1814 to June 1820.

In 1863, Mr J. Askunas won tender from the Queensland Government to mine the island for guano for 300 pounds per annum for 10 years.

The lighthouse is on the National Heritage list because it is a timber-framed construction with a cast iron cladding, which was premade in England and shipped to the island in pieces.

The Lady Elliot Island Lightstation Heritage Management Plan was developed by the Great Barrier Reef Marine Park Authority (GBRMPA) in March 2012 to protect, conserve and manage the Commonwealth Heritage values of the Lady Elliot Island lighthouse.

In 1969, Don Adams (who later went on to found Seabird Aviation) built accommodation for the island, along with a grass air strip, which continues to be used in the 2020s.

Since the change of lessee, a program to progressively renovate the island's facilities and make them more ecologically friendly has been implemented.