Simpson Bay Lagoon is one of the largest inland lagoons in the West Indies of the Caribbean. It is located on the island of Saint Martin. The border between the French and Dutch halves of the island runs across the centre of the lagoon. There are two small islands that lie in the lagoon: the larger, Grand Ilet to the north, is within the French region of Saint-Martin; the smaller, Little Key, to the south, is on the Dutch Sint Maarten side.

Saint Martin is an island in the northeast Caribbean, approximately 300 km (190 mi) east of Puerto Rico. The 87-square-kilometre (34 sq mi) island is divided roughly 60:40 between the French Republic and the Kingdom of the Netherlands, but the Dutch part is more populated than the French part. The division dates to 1648. The northern French part comprises the Collectivity of Saint Martin and is an overseas collectivity of the French Republic. The southern Dutch part comprises Sint Maarten and is one of four constituent countries that form the Kingdom of the Netherlands. Even though the island is an overseas possession of two European Union member states, only the French part of the island is part of the EU.