Simpson Bay Lagoon is one of the largest inland lagoons in the West Indies of the Caribbean, situated on the island of Saint Martin. The border between the French and Dutch halves of the island runs across the centre of this body of water. It connects to the Caribbean Sea via a small channel in the north-west flowing into Baie Nettlé in Saint-Martin and another in the south-east flowing into Simpson Bay in Sint Maarten. The lagoon serves as a significant geographical feature dividing the two administrative regions.

Historically, the area was not a lagoon but a lake. A hurricane in 1819 breached the natural isthmus at Pelican, isolating the Simpson Bay fishing community for a century. Halfway through the 20th century, an artificial canal at the current Simpson Bay Lagoon Bridge replaced the initial natural waterway. Previously, traffic between Marigot and Princess Juliana International Airport had to go around the lagoon via the Lowlands area. In 2013, the Simpson Bay Causeway Bridge was opened, connecting Marigot with the northern end of the airport runway.

The lagoon contains two small islands: Grand Ilet, also known as Explorer's Island, lies to the north within the French region, while Little Key is on the Dutch Sint Maarten side. Mullet Pond is a section of the lagoon that still contains a substantial portion of Red Mangroves and has been a protected Ramsar site since 2014. The protected waters provide significant seagrass and mangrove habitats, serving as well-known juvenile reef fish recruitment areas that likely feed marine protected areas in both St. Maarten and Saint-Martin.

The calm waters make the lagoon a safe harbor for vessels seeking repairs, supplies, and protection from hurricanes. Major economic events include the yachting high season during winter, the Caribbean Multihull Challenge regatta in early February, and the St. Maarten Heineken Regatta in early March. The megayacht charter industry is a conspicuous aspect of the yachting sector centered around this location. These events draw visitors to experience the maritime culture and regattas associated with the lagoon.

St. Maarten's marine industry, centered around the lagoon, represents 12.5% of the island economy compared to 9.5% for the Hotel and Restaurant industry. However, land-based sewage wastewater has resulted in bacterial levels far exceeding acceptable norms, with enterococci levels exceeding allowable limits in 96% of samples. Certain urbanized areas like Cole Bay and Marigot do not experience sufficient water flow to remove pollutants, leading to murky water and excessive algal growth. Princess Juliana International Airport lies close to the lagoon's southern shore.