From their merger to the mouth of Observatory Inlet is approximately 50 km (31 mi) in length, running south-southwest to its merger with the Portland Canal just southwest of Nass Bay, which is an arm of Observatory Inlet and the saltwater outer estuary of the Nass River.

The smelter ghost town of Anyox is located on the west side of the inlet at Granby Bay, which marks the beginning of Hastings Arm.

The former mining town of Kitsault is located 2.5 km (1.6 mi) due south of Alice Arm, on the far side of the inlet's shoreline.

With no rail nor road connection to the rest of British Columbia, these mining towns relied on shipping through Observatory Inlet.

Adjacent to the community of Alice Arm, but on the east side of the Kitsault River, is the Nisga'a village of Gits'oolh (formerly Gitzault Indian Reserve No.