Gracetown is a small town 21 kilometres north-west of the township of Margaret River on the coast at Cowaramup Bay. The town is well known for its excellent surfing surfing spots - mainly North Point, South Point and Huzzas in the middle of the bay. The main beach area, located in the bay, is an easily accessible and safe swimming beach suitable for families with small children.

Nearly every property in the township enjoys breathtaking views of the ocean and most of the blocks are generous in size and support a high proportion of magnificent houses, some of which are popular holiday homes that are available to rent all year round.

There are community playing fields, a community hall and general store located in the town that provides a variety of goods and limited services.