Dungeness Bay is formed by depositional features that partially enclose the embayment, including Dungeness Spit, Graveyard Spit, Cline Spit and the Dungeness River delta. Located on the southern shore of the Strait of Juan de Fuca and the northern coast of the Olympic Peninsula, it lies about 19 miles (31 km) west-northwest of Port Townsend and 14 miles (23 km) east-northeast of Port Angeles, Washington. Europeans first recorded Dungeness Spit during the Spanish expedition of 1790 led by Manuel Quimper on the Princesa Real. British explorer Captain George Vancouver named the landform in 1792 after the Dungeness headland in England. The spits are formed principally by the predominant west-to-east wave direction through the strait, which amplifies tidal currents that are strongest on the flood and transport sediment eroded from glacial bluffs along the Olympic Peninsula coast eastward. Dungeness Bay is mostly mud in the central areas and near the river delta, sand along the outer perimeter of Dungeness Spit and gravel in scoured tidal channels. Fine sediments creating the mud bottom are derived from the Dungeness River, which starts at 6,400 feet (1,951 m) on the north flank of the Olympic Mountains and flows generally north for 32 miles (52 km), draining a watershed of 172,000 acres (69,606 ha).

A projectile point embedded in a mastodon bone, found in 1977 in the Dungeness River watershed, provides evidence that humans have inhabited the area for at least 13,000 years. In 1790, when Quimper explored the area, there were 13 permanent villages along the shores and bays of the Strait of Juan de Fuca, plus numerous seasonal camps for fishing, hunting and gathering. The watershed is historically part of the traditional territory of the Klallam people; before European-American settlement, the population numbered 400-1200. In 1855 the Point No Point Treaty was intended to settle land claims with several tribes, including the local band of Klallams, and relocate them to a reservation on Hood Canal, but many tribal families refused to give up their traditional homeland. In 1874 the Dungeness band of Klallams purchased 200 acres (81 ha) along Dungeness Bay to avoid moving to a reservation. They named their community Jamestown after their leader, Lord James Balch, and officially became the Jamestown S’Klallam Tribe. European-Americans moving to the Dungeness valley rapidly exerted major changes: removing ancient forests, constructing irrigation systems, bridges and dikes, and draining tidal areas near the river mouth to create farmland. Fish-hatchery practices from 1902 to the 1960s altered the genetic composition and spatial distribution of Dungeness salmon. While portions of the upper watershed are protected within Olympic National Park, other federal and state forest lands are managed for timber harvest, and lower elevations are used for farming and residential development. In 1915 President Woodrow Wilson designated Dungeness Spit and portions of Dungeness Bay as a national wildlife refuge.

The Dungeness National Wildlife Refuge comprises 773 acres (313 ha) and protects habitat for more than 250 bird species and 41 land-mammal species. In 2009 the cumulative coverage of seagrass in Dungeness Bay was 363 acres (147 ha), representing important fish habitat for Chinook, coho, pink and chum salmon. Harbor seals haul out to rest and give birth to pups on Dungeness Spit, and the tide flats support crabs, clams and other shellfish. The Washington State Department of Natural Resources leases subtidal lands to private businesses; this has been an important area for oyster farming since before 1953. The Jamestown S’Klallam Tribe purchased an oyster farm in 1990 and operated it for a few years before it was decertified because of contamination in the bay. They led a local effort to understand contamination sources, including failing septic systems near tributaries or along the shoreline. A conservation plan was developed that included manure management, alternative livestock watering, pasture management and a reduction in bacterial contamination from nearby commercial and hobby farms. By 2015, after decades of clean-water management, there were signs of success: the entire inner bay had conditional approval for commercial oyster harvests. The Jamestown S’Klallam Tribe sought to re-establish their oyster farm and in 2021 obtained all the required permits. Read more here and here. Explore more of Dungeness Bay and the Strait of Juan de Fuca here: