Often spelt Padangbai this tiny inlet is fringed with reef which
starts as a shallow ledge at a depth of ten meters. A slope drops down to 20 meters futher to sea, after which a sandy bottom levels out at 40 meters. The slope is dominated by magnificent anemones, black and yellow featherstars and sea squirts. Oriental sweetlips, boxfish and yellow trumpetfish are common on dives here.
Commonly named Blue Lagoon this dive site around the headland also has a resident Napoleon wrasse and reef sharks are often seen. August to September can reward lucky divers with sightings of Australian Wobbegong sharks and the elusive Mola Mola sunfish.
Macro fans will have fun diving around the Padang Bay jetty where all manner of critters can be found in the shallows. The sheltered bay is also an ideal location for night diving. Better viz and bigger fish can be found further out into Amuk Bay.