Bynoe Harbour is located to the south of Darwin Harbour and the Northern Territory's capital city of Darwin. These two major estuaries and natural harbours are separated by Cox Peninsula. Because the two harbours are located close to one another, and are similar in size and habitat, Bynoe is often referred to as a "sister harbour" to Darwin Harbour.

The main difference between the two harbours is that Bynoe has a number of islands and drying reefs inside and outside, which makes it considerably more interesting for boaters than Darwin Harbour. The habitat of Bynoe Harbour is still pristine and fishing is popular. Bynoe Harbour has so far escaped having industry on its shores and there are only some minor dwellings on the north shore and a small fishermen's resort on the south shore.

Bynoe Harbour is relatively shallow at about 40m in the deepest areas, with much of its area much shallower and drying at low tide. Most of the harbour is lined with mangrove forest, providing a rich habitat for various stages of marine life. Tidal movement reaches a considerable 8 metres.