It is situated on the bank of the River Mite and adjacent to Muncaster Mill, formerly a watermill but now a private house, from which it takes its name.

There is a siding built into the platform surface, which was formerly used for storage of permanent way engineers' rolling stock, and by shuttle trains on Gala event days.

The platform is not long enough to accommodate step-free access to the disabled carriages, which are normally located towards the eastern end of each train set, on both the eastbound and westbound journeys.

Muncaster water mill ground wholemeal flour up until the end of World War I but government legislation made this uneconomic so it turned to crushing grain for cattle feed.

The Ravenglass and Eskdale Railway Company purchased the mill in 1975 and had it restored to working order as a tourist attraction.