Spirits Bay is located at the northern end of the Aupouri Peninsula at the northern tip of New Zealand's North Island. At the western end of the bay is Cape Reinga, from which, according to Māori legend the spirits of the dead leave for their journey to the afterlife (hence the bay's name).

The bay is 12 kilometres in width and is one of two bays (the other being Tom Bowling Bay) in the short length of coast that marks the tip of the North Island.