The town is situated on the northern shore of Jervis Bay about 20 minutes drive from Nowra and 10 minutes from Culburra Beach. Callala Bay has an approximate elevation of 13 metres (43 ft) above sea level, and is located inland from Callala Point, a headland facing the Tasman Sea. Nearby settlements include Callala Beach to the south-west, Currarong to the south-east and Culburra Beach to the north-east. Local facilities include a safe harbour, jetty, sailing club, boat ramp, primary school and a small shopping centre. In 2006, the population of Callala Bay was 1,951.