The Portuguese explorer Bartolomeu Dias was the first European to reach Algoa Bay in 1488, where he planted a wooden cross on a small island now called St Croix or Santa Cruz island. He gave the bay a name meaning "Bay of the Rock", which was changed in Portugal to Bahia de Lagoa or Bay of the Lagoon, and which eventually became Algoa Bay.
The bay contains six named islands in two groups of three that according to BirdLife International “are of considerable importance as they are the only islands along a 1,777 km (1,104 mi) stretch of coastline between Cape Agulhas and Inhaca Island in Mozambique." The combined surface area of these islands is said to be 40 ha (99 acres).
Close inshore, near the new Ngquru harbour development at Coega, on the north-eastern outskirts of Port Elizabeth, is the St Croix group, consisting of a main island of that name and two lesser islets, Jahleel Island just off the Ngquru breakwater and Brenton Island on the seaward side. The second group consists of Bird, Seal and Stag Islands. All six islands and their adjacent waters are declared nature reserves and form part of the Addo Elephant National Park. The islands are closed to the public.
The BirdLife fact sheet adds that 14 species of seabirds, several species of shorebirds and 33 species of terrestrial birds have been recorded on the islands. The islands are home to 43% of the global population of the African penguin, the majority of which are on St Croix. Bird Island is one of only six breeding sites (and said to be the biggest) in the world for the Cape Gannet.
The bay is also home to various dolphin and whale (in season) species, Cape fur seals as well as many fish and shark species and offer excellent scuba diving opportunities.
Port Elizabeth and Algoa Bay is also tagged as the "Water Sport Capital" of Africa because of the huge variety of watersport options it has to offer.