Before the completion of the Ship Canal and the opening of the Hiram M. Chittenden Locks, Union Bay extended well into the present-day shopping center of University Village. After the canal's completion and the subsequent 9-foot drop in water level in Lake Washington in 1916, much of the bay drained away, and the marsh retreated to its current protected area now known as the Union Bay Natural Area.
Located on the western shore of Lake Washington, Union Bay officially terminates at the eastern opening of the Montlake Cut and encompasses the waters north of the Arboretum between Webster Point and the north shore of Madison Park. Features of the bay include the WA-520 bridge, a large art instillation by Max Gurvich entitled "Aurora Borealis," and the University Slough. Union Bay has several islands including Foster Island, Broken Island, and the creatively named Number 2 Island. The University of Washington Waterfront Activities Center rents canoes and rowboats to students, faculty, and the general public.