It is also notable for almost dividing the province; an isthmus occupied by the city of Summerside and the unincorporated communities of North St. Eleanors, Sherbrooke and Travellers Rest separates Malpeque Bay from Bedeque Bay on the island's south shore.

It consists of marine and coastal wetlands ranging in altitude from sea level to 8 m.[2] It is protected from the Gulf of St. Lawrence by a sandspit and dune formation that stretches 25 km.

It is "important for supporting large nesting colonies" of herons and cormorants,[3] and is a meaningful nursery area for fin and shell fishes.

Prince Edward Island's largest industrial operation, two french fry processing plants operated by Cavendish Farms, discharge into the Barbara Weit River in the southeastern corner of the bay.

A petition was also organized in the early 2000s to stop a proposed wind energy project along the eastern shore of the bay which was submitted to Natural Resources Canada.