It is located on the Atlantic coast of Cape Breton Island at the mouth of Sydney Harbour, which forms part of Spanish Bay.

[3][4][5] Spanish Bay opens to the north-west directly onto the southern terminus of the Cabot Strait and so to the Gulf of Saint Lawrence.

The bay measures approximately 7 nautical miles (13 km; 8.1 mi) wide at its mouth, between Alder Point on Boularderie Island to the north-west, and Low Point on Cape Breton Island to the south-east.

The bay's shores are mostly bold & rocky with numerous prominent headlands including Point Aconi, High Cape, Alder Point, Merritt Point, Bonar Head, Oxford Point, Black Point, Cranberry Point, McGillivray Point and Petries Point, although there is a 0.75 kilometres (0.47 mi) sandy beach at Florence Beach (Big Pond Beach)[6] and a popular swimming beach at Polar Bear, just to the north of South Bar.

Communities along the shoreline of Spanish Bay include (from northwest to south to northeast):