Crofts Bay lies between the Bay of Martyrs and the Bay of Islands proper, 3 km west of Peterborough in the Bay of Islands Coastal Park. It is 1.2 km wide and unusual on this coast in being genuinely sheltered: extensive reefs and a scatter of sea stacks extend up to a kilometre offshore and break the Southern Ocean swell before it reaches the steep, rip-free beach. That shelter is what makes it a shore dive, and the Scuba Doctor describes plenty of interesting structure to explore around 80–100 m offshore, with boat diving available on the outer reefs in 20–25 m. The inner reef is limestone ridges, gutters, ledges and the submerged bases of the stacks in 3–8 m, kelp-topped and sponge-sided, holding crayfish and abalone in the ledges and the usual western Victorian fish community of wrasse, sweep, magpie perch, zebrafish and leatherjackets, with rays on the sand between. The outer reefs, a kilometre out, are open-coast limestone in 20–25 m with the richer invertebrate cover and bigger fish that come with clearer, more stable water, and they are essentially unexplored by anyone but a few local boat divers.

Like its neighbours it is a high-tide, low-swell site, but it earns its place as the most forgiving of the three bays for a shore dive and the best choice for a first look at this coast. The steps from the car park are short, the beach is steep enough that you are in swimming depth quickly, and the inner reefs give an hour or more of easy exploration in a landscape of stacks and bluffs that is as dramatic from below as from the lookouts above. It suits Open Water divers comfortable with a surface swim and some surge, and it is a fine snorkel on the calmest days. Boat divers should treat the outer reefs as an exposed advanced site.

From Peterborough drive about 3 km west on the Great Ocean Road to the signposted Crofts Bay car park on the seaward side; take the steps down the bluff to the beach at the western end of the bay (a short, steep carry). Enter from the sand and swim out 80–100 m to the reef structure. Boats launch at the Peterborough Bay of Islands (Boat Bay) ramp off Boat Bay Road or the Curdies River ramp at the end of Dorey Street in Peterborough; the river ramp requires crossing the Curdies Inlet bar, which is only possible at higher tides and in small swell.

Boat divers work the outer reefs in 20–25 m a kilometre offshore. Visit Victoria lists Crofts Bay among the recommended shore dives of the Port Campbell area.

Crofts Bay is the most sheltered of the Bay of Islands beaches because reefs and stacks extend up to a kilometre offshore and filter the swell; wave heights at the beach are low and rips minimal. Even so it faces south-west and the Scuba Doctor's advice applies: dive at high tide when the reefs are covered, on a low swell with offshore northerly winds, and if you see lots of white water on the outer reefs, head home. The outer boat reefs in 20–25 m are fully exposed and need swell under about 1 m.

Visibility is best after settled northerly weather in autumn. Shore diving is possible on more days here than at the Bay of Martyrs.

Shore: enter at high tide from the western end, swim out 80–100 m and descend on the inner reef in 3–6 m, exploring gutters, ledges and the bases of the stacks westward and back, turning at half gas and exiting where you entered. Boat: anchor on sand beside the outer reef in 20–25 m, work the ridges and walls, and return to the anchor for a 3-minute stop.

No operator – independent shore divers on calm days; occasional Warrnambool Diving and club trips by boat to the outer reefs.