Whale Bay is on the northeastern coast of the Kenai Peninsula in Prince William Sound, and extends northeast for 4 miles (6.5 km) to the southern end of Knight Island Passage, about 88 miles (141 km) west-southwest of Cordova and 45 miles (73 km) east of Seward, Alaska. The local name was first reported in 1905 by Ulysses S. Grant and Daniel F. Higgins of the U.S. Geological Survey and Northwestern University. Frank C. Schrader was one of the first geologists to explore Alaska for the U.S. Geological Survey and spent several years exploring and mapping. In 1900, Schrader and Arthur C. Spencer, Thomas G. Gerdine, and David C. Witherspoon investigated the geology and mineral resources between Valdez and the Copper River. Schrader was the first to describe the Orca group, a belt of rocks consisting mostly of greywacke, slate, and greenstone, which he named after Orca Bay in eastern Prince William Sound. In 1905, Grant and Higgins recognized the same rock formation at Whale Bay in western Prince William Sound. The southcentral Alaska continental margin is comprised of a collage of Mesozoic and Cenozoic terranes related to the active motion between the Pacific oceanic plate and the North American continental plate. The Chugach-Prince William terrane is an accretionary complex well exposed for about 1,367 miles (2,200 km) in southern Alaska and is inferred to be one of the thickest accretionary complexes in the world. This terrane is represented in Prince William Sound between the Wrangellia composite terrane to the north and the modern accretionary Pacific plate to the south. The bulk of the Chugach-Prince William terrane is comprised of Late Cretaceous to Eocene deepwater turbidites and volcanically metamorphosed sandstones. In Prince William Sound, the terrane is subdivided between the northern Valdez group of the Late Cretaceous and the southern Orca group. Fossils in the Orca group include alder pollen, foraminifera, echinoderms, crabs, and pelecypod which together suggest a Paleocene to late Eocene age. There is evidence of several Pleistocene glacia­tions in Prince William Sound and the most recent series of ice advances during the Holocene are mostly responsible for the present-day landscape. There were three major intervals of late Holo­cene glaciation. The first advance in this area dates between about 3200 and 2400 years ago, the second occurred about 1410 years ago, and the third began between 650 and 580 years ago and ended sometime during the early 19th century.

The earliest human migrants into the region probably found a landscape dominated by sedge tundra with thickets of willow and alder. The Chugach people were the first Indigenous Alaskans to encounter the Russian explorer Vitus Bering in 1741. In 1778, Prince William Sound was explored by British Captain James Cook, and other English, as well as Russian, and Spanish adventurers followed Cook on voyages of exploration. In 1783, the Russian Captain Potap K. Zaikov entered Prince William Sound in a trading vessel, which is the first time Russian traders are definitely known to have reached the Alaska mainland. In 1786-1787, British Captain John Meares in the trading vessel Nootka wintered in Prince William Sound.  British Captains Nathaniel Portlock on King George and George Dixon on Queen Charlotte spent part of the summer of 1787 in the sound. In 1790, Spanish Lieutenant Salvador Fidalgo explored the northern coast of Prince William Sound and applied the name Puerto de Valdes which is now used in the modified form Valdez for both the bay and the town. In 1794, British Captain George Vancouver on HMS Discovery carried on extensive explorations and Lieutenant Joseph Whidbey sailed a small boat south from Port Wells along the western coast of Prince William Sound. The Russians were the first to establish settlements and organize a fur trade with the Chugach people. They directed their activities in Prince William Sound from Nuchek on Hinchinbrook Island, mainly engaged in the fur trade, and made no great effort to find valuable minerals, promote mining or fishing, or to otherwise develop the numerous resources of the region. After the purchase of Alaska from Russia by the United States in 1867 the activities of the Russian fur traders were immediately taken up by American companies which established widely scattered trading posts throughout the Alaska Territory and were the first to encourage prospectors to undertake the search for valuable mineral deposits in Prince William Sound and in other parts of Alaska. This interest in mineral deposits was greatly stimulated by the discovery of gold on the Klondike River in 1896. But some of the miners remained to look for gold and copper in the mountains surrounding Prince William Sound, and their number grew rapidly and probably reached its maximum around 1907. Although the mountains and recently exposed fjords of western Prince William Sound were scoured by hopeful prospectors, and significant ore deposits were discovered at nearby Latouche Island and mined by the Reynolds-Alaska Development Company, no claims were ever filed in Whale Bay.

Alluvial fans and debris cones are common features along the shoreline of fjords in Prince William Sound. Alluvial fans develop as deltas at the mouth of rivers by sediment deposits. Debris cones develop at the base of snow and rock avalanche slopes. The snowfall in Prince William Sound is often over 25 feet (7.6 m) per year. Combined with the steep terrain and rapidly changing maritime air temperatures, powerful avalanches occur that have the capability of entraining massive volumes of ice, vegetation, and rocks. The sedimentary rocks of the Orca group weather relatively quickly into a friable rock that disintegrates easily. Rock weathering is caused by deterioration through contact with water, atmospheric gases, and biological organisms. Weathering occurs in situ, or in-place, with little or no movement, and is differentiated from erosion which involves the transport of rocks by water, ice, snow, wind, waves, and gravity. Weathering processes are divided into physical and chemical weathering. Physical weathering is the most prevalent in Prince William Sound and involves the breakdown of rocks and soils, for example through the mechanical effects of water freezing and thawing. Chemical weathering involves the reaction of water, atmospheric gases, and biologically produced chemicals. Rock and snow avalanche paths are often indicated in the summer by deeply incised ravines filled with scree (gravel), sometimes with cascading streams. Avalanche paths have a start zone where the slide material originates at high elevation, a track along which the avalanche flows, and a runout zone where the avalanche comes to rest. The debris deposited at the base of the avalanche path is the accumulated mass of material transported during the slide. The rapid deceleration of the debris at the shoreline will often form a debris cone of poorly sorted gravel that gradually becomes vegetated with avalanche-tolerant grasses and alders. Post-glacial rebound is occurring at a rate faster than sea-level rise causing the relative uplift of the land in Whale Bay. As the debris cone emerges from the estuary, a succession of vegetation becomes established over time with salt-tolerant grasses at the upper margin of the intertidal zone, which transitions to terrestrial grasses, then alders, and finally spruce trees at the highest elevation. Read more here and here. Explore more of Whale Bay here: