The surrounding area is the Margaret River Wine Region and has become known for its wine production and tourism, attracting an estimated 500,000 visitors annually. In earlier days the area was better known for hardwood timber and agricultural production.

Margaret River is located 9 kilometres (5.6 mi) inland from the Indian Ocean at a point about halfway between Cape Naturaliste and Cape Leeuwin in Western Australia's South West region.

The Margaret River Wine Region extends about 120 kilometres north-south from Cape Leeuwin to Cape Naturaliste and about 30 kilometres inland. High-quality table wine grapes have been grown by a variety of commercial vineyards since the first significant plantings at 'Vasse Felix' were established in 1967.

Several hundred caves are located near Margaret River, all of them within Leeuwin-Naturaliste National Park. Six of these are open to the public.

 

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