The aptly named Bay of Islands lies to the east of Diamond Bay and is part of the Mornington Peninsula National Park. The craggy limestone rock formations create picturesque rocky outcrops (or islands) just off the coastline and make for great photographs. Access is via the Diamond Bay car park, and the track to the Bay Of Islands also gives good views back towards Diamond Bay.

Please keep to the paths to reduce erosion damage.

Swimming is not advised due to rocks beneath the water surface and strong currents.