The most prominent geologic feature of Bodega Bay is Bodega Head, a peninsula that forms the protective arm between the Pacific Ocean and the bay. Connecting the granite headlands to the mainland are sand dunes inside which lies the inner bay and harbor. Steep rocky bluffs rise from the sandy coves and beaches. Atop the bluffs, grasslands rise more gently to the coastal ridges. The coastal waters remain at a fairly constant temperature throughout the year - ranging from the high 50s to the low 50s.

As with all coastal areas of California, Bodega Bay's geology has been shaped by the San Andreas Fault which runs parallel to the coast coming ashore at Bodega Head. The fault is the boundary between the Pacific plate and the North American continental plate. Bodega Head provides visual evidence for the theory that Bodega Head is part of a land mass that once lay due west of the Bakersfield area. The gray and white speckled rock so evident on the head is common locally west of the fault, but is not found east of the fault until the Tehachapi mountains, 300 miles to the South.

While the San Andreas Fault has not been particularly active in this area, it is the major active fault along the coast and so must be taken into account . Accordingly, new construction is subject to geologic hazard review and special building code requirements to minimize hazards in the event of a major earthquake. Likewise, purchasers of property within special geologic hazard zones are provided by law with information disclosing the facts and outlining safeguards.