The town is part of the Miami metropolitan area of South Florida and situated on a barrier island between the Atlantic Ocean and the Intracoastal Waterway.

The entire town is approximately 5⁄8 of a mile (1.0 km) long along South Ocean Boulevard (Florida State Road A1A), its only street.

[8] Since 2007, Palm Beach County has completed several engineering studies to evaluate long-term erosion control alternatives, including doing nothing.

Plans called for a $5.6 million "Southern Palm Beach Island Comprehensive Shore Stabilization Project" during 2019 and 2020 that was designed to rebuild about 0.67 miles of the town's shoreline.

[9] In early 2019, the County determined that the project was "cost prohibitive" and officially withdrew a request for the needed permits from the Florida Department of Environmental Protection.

[14] A feasibility study and extensive engineering analysis indicated a series of seven low-profile groins with beach dune fill components providing a more stable shoreline with less frequent sand placement.

As of 2000, English was the first language spoken by 92.96% of residents, Finnish by 3.90%, and French as a mother tongue made up 3.12% of the population.

[22] Initially built in 1964, the Polynesian-inspired, 58-room Palm Beach Oceanfront Inn and its ocean-front restaurant Tides Bar and Grille, located at 3550 South Ocean Boulevard, made up the only commercial business establishment within the town of South Palm Beach.

[25] Known to locals by its former name, the Hawaiian Inn, the two-story motel lost most of its beach during Hurricane Wilma in 2005 and was not being maintained.

[26] A proposal by the Paloka family-owned-and-operated realty company to replace the inn with a luxury resort-style 12-story condominium-hotel built over two stories of parking was unanimously rejected by the South Palm Beach Town Council in October 2007.

On September 18, 2009, the Treasure Coast Regional Planning Council meeting expressed concerns about the redevelopment.

[25][33][34] Although the property has received minor renovations and is being managed as a hotel and restaurant, the long-term prospects for it are for condominiums according to the CEO of Paragon.

[35][36] The current zoning for oceanfront property in the town allows 33 units per acre, while a more dense project would require a referendum.