Arnö is situated on a peninsula on the south side of the bay, with Nyköping on the north side. Locally, Arnö is considered a part of main Nyköping, but is designated a locality due to the mile-long stretch between Nyköping and itself. The populated area was mainly built in the 1970s and has become a southern suburb of Nyköping, being in walking distance from the city. Expansion is planned eastwards towards the beach of Örstigsnäs.
The locality is divided into four areas. The northwestern area is named Herrhagen, which is a high-density residential area with mostly apartments. Långsetter is the largest area, located in between the circular road. It consists of villas as well as Tract housing. The northeastern area is named Kuggnäs after an old farm. The buildings in that area is mostly villas. The last area is Finntorp and Björkö, which together forms an area for manufacturing industries as well as commerce. The local prison of the Nyköping Municipality area is located here as well as the spare parts storage center of Saab Automobile.