It is located immediately east of the town centre in Måløy in the Ulvesund strait between the large island of Vågsøy and the village of Degnepoll on the mainland.

The island became an important trading post for the region and was the original site of the town of Måløy.

Moldøen with its trading privileges was owned by a number of succeeding families such as Fester, Glad, Friis, Knoph, Schmidt and Lem until the area was expropriated by the municipality for development.

Today, the island is connected to Måløy by a land-filled causeway and is the site of a park featuring the remains of the German fort, two memorials of World War II and a disc golf course.

The island also has a modern rope and trawl factory, a large freeze warehouse, and an ISPS port.