The Gulf of Mexico is to the south of the island; the Mississippi Sound and Mobile Bay are to the north. The island's eastern end helps to define the mouth of Mobile Bay. The eastern, wider portion of the island is shaded by thick stands of pine trees, but the narrow, western part of the island features scrub growth and few trees.
Dauphin Island is home to Fort Gaines, Dauphin Island Sea Lab, The Estuarium public aquarium, several restaurants, an airport, boat ramps, a large public pier, new condominium developments, historics sites, and numerous private homes. Beaches attract tourism, and fishing is a popular activity in the waters around the island. The island is connected to the mainland by the Gordon Persons Bridge.
Although the island has several bird sanctuaries, the main one is the 164 acre (66.37 ha) Audubon Bird Sanctuary. Dauphin Island is the first landfall encountered by many birds as they migrate north from South America, and as a consequence many species can be found resting there before continuing their journey.
As of the census of 2000, there were 1,371 people, 601 households, and 418 families residing in the town. The population density was 221.2 people per square mile (85.4/km²). There were 1,691 housing units at an average density of 272.9/sq mi (105.3/km²). The racial makeup of the town was 96.43% White, 0.44% Black or African American, 1.60% Native American, 0.58% Asian, and 0.95% from two or more races. Hispanic or Latino of any race were 0.95% of the population.
There were 601 households out of which 21.6% had children under the age of 18 living with them, 61.7% were married couples living together, 5.0% had a female householder with no husband present, and 30.3% were non-families. 23.0% of all households were made up of individuals and 6.3% had someone living alone who was 65 years of age or older. The average household size was 2.28 and the average family size was 2.66.
In the town the population was spread out with 17.4% under the age of 18, 7.4% from 18 to 24, 25.7% from 25 to 44, 33.3% from 45 to 64, and 16.2% who were 65 years of age or older. The median age was 45 years. For every 100 females there were 111.6 males. For every 100 females age 18 and over, there were 114.0 males.
The median income for a household in the town was $44,219, and the median income for a family was $50,476. Males had a median income of $35,179 versus $24,250 for females. The per capita income for the town was $22,552. About 6.0% of families and 9.2% of the population were below the poverty line, including 6.7% of those under age 18 and 5.4% of those age 65 or over.