Ponce Inlet is located at the southern end of a barrier island, on the edge of an inlet connecting the Halifax River with the Atlantic Ocean. Because of that inlet, the town is also the location of several marinas.

At the inlet is the Ponce de Leon Inlet Light Station, a lighthouse constructed in 1887 when the inlet was known as Mosquito Inlet (which led to the north end of Mosquito Lagoon). It's the second tallest lighthouse in the United States and is visited by more than 80,000 people per year. The folks are allowed to climb the 175-foot tower and enjoy a view that stretches from Daytona Beach in the north to New Smyrna Beach in the south. The lighthouse is a designated National Historic Landmark and the lighthouse keeper's dwellings and other station buildings are part of a museum with exhibits on lighthouse life, lighthouse and Fresnel lens restoration, lighthouse keepers and families, local and state history and famous shipwrecks in the area.

The population of Ponce Inlet is up 20% since 2000. Some of the reasons for that are the relaxed lifestyle at the end of the road, the uncrowded beaches and the excellent fishing.