Halfmoon Bay lies on the eastern coast of Stewart Island (Rakiura). Oban, the island's only township and the base for most activities, is nestled at the head of the bay, where a small fishing fleet and the daily ferry service from Bluff dock.
The bay is home to a handful of lovely sandy beaches, including the beach at Oban, Bathing Beach and Lonnekers Beach, all only a short walk from the centre of town and popular with families and coastal adventurers.
Halfmoon Bay and the neighbouring Horseshoe Bay are the subject of a name mix-up by early cartographers. Halfmoon Bay is in fact shaped more like a horseshoe, while Horseshoe Bay is shaped like a half moon.