It lies in the civil parish of Martinhoe at the edge of the Exmoor National Park and is a waypoint on the South West Coast Path.
In 1885 the Manor of Martinhoe, including the then-named Wooda Bay, was purchased by Colonel Benjamin Lake, a wealthy solicitor from Orpington in Kent.
In 1898, The narrow-gauge Lynton & Barnstaple Railway arrived, with a relatively substantial station built high above the bay.
In January 1897, with the pier almost completed, a major steamship company operating in the area announced that they would be sailing to Woody Bay instead of Lynmouth.
Although there was a regular service from Bristol, fewer steamers were calling than had been intended, and plans were drawn up to extend the pier further out into the bay.