Middle Island was once home to one of Queensland's early underwater observatories, a tourist attraction that let non-divers view the reef through windows below the waterline. The observatory has long been closed, and the structures that remain underwater now serve as habitat, forming an informal artificial reef among the island's natural coral. The site is shallow, from about 2 m to 10 m, with patches of plate and table coral separated by sand.

Smaller reef fish and invertebrates are abundant among the coral, and the old structures attract schools of fish and larger residents. Olive sea snakes are common here and usually inquisitive; they are not aggressive and are a highlight for many divers. Because it is close to Great Keppel, sheltered and shallow, the Middle Island observatory site is one of the Keppel operator's main training locations, used for Open Water course dives and Discover Scuba, as well as for relaxed second dives.

Photographers can use the observatory remains as a frame for fish shots. Middle Island is a national park, and its waters form part of the Great Barrier Reef Marine Park. The northern side of the island, Olive Point, offers a second, similar coral garden dive.

Middle Island will not challenge experienced divers, but it is a good-value, low-stress dive that combines reef life with a slice of local tourism history and gives newer divers an easy introduction to Keppel Bay's coral and sea snakes. Ask the operator about the current condition of the old structures before the dive; they are gradually breaking down and should be treated as habitat rather than something to swim into.

Drive 40 km (about 40 minutes) from Rockhampton to Yeppoon, then 7 km south along the Scenic Highway to Keppel Bay Marina at Rosslyn Bay Harbour, where there is free and paid parking. Freedom Fast Cats and Keppel Konnections ferries run to Great Keppel Island (Fisherman's Beach) in about 30 minutes; Keppel Dive & Water Sports picks up certified divers from the island. Middle Island is a small national park island close to Great Keppel, about 10 minutes by dive boat from Fisherman's Beach or roughly 30 minutes by private boat from Rosslyn Bay.

Boats anchor on sand near the old observatory site on the island's southern side; Olive Point is on the northern side of the same island.

Keppel Bay is exposed to the prevailing south-east trades (strongest April-September) and to summer northerlies. Middle Island is close to Great Keppel and relatively sheltered, which is why it is used for training; winds above about 20 knots or strong northerlies make the anchorage uncomfortable. Currents are generally slight.

Visibility is 5-12 m and drops after strong winds or rain. Diveable most of the year.

Descend near the old observatory structures in 6-8 m, explore them for fish life and sea snakes, then follow the coral patches along the island's edge in 3-6 m before returning to the anchor. Ideal for skills practice on sand patches between the coral.

Keppel Dive & Water Sports (PADI 5 Star, based on the Spit at Great Keppel Island next to Great Keppel Island Hideaway) runs guided boat dives to the Keppel sites most days, weather permitting, plus courses and Discover Scuba; site choice is made on the day according to wind. Private boats from Rosslyn Bay also dive here. Middle Island is used regularly for courses and novice dives.