The St. Andrew Bay watershed is the only major watershed located entirely within the Florida Panhandle. For management purposes, it is defined as incorporating the interconnected St. Andrew, West, East, and North bays; St. Joseph Bay; Deer Point Lake; and the Sand Hill Lakes, as well as the respective surface water basins of each of these waterbodies. This watershed includes portions of Bay, Washington, Gulf, Calhoun, Walton, and Jackson counties. The St. Andrews Bay Watershed is 1,144 square miles (732,275 square acres) in size.
The St. Andrew Bay system is one of the most diverse ecosystems in North America, rivaling Indian River Lagoon, Florida. Over 2,100 marine dependent species have been recorded for this bay system, and this system has the largest seagrass stock in the Florida panhandle. The beaches within the aquatic preserve and adjacent beaches provide valuable nesting grounds for protected sea turtles such as the endangered green, and threatened loggerhead. Several threatened and endangered shorebird species also use these areas for nesting. The extensive seagrass beds and marshes provide habitat and nursery grounds for many economically important fish and shellfish species.