Like pearls scattering in the East Sea, the Penghu archipelago is located in the southwest of the Taiwan Strait. The location is between Chiai county and Kinmen county, facing Taiwan on the east, and Fuchien Province on the west, linking Matsu archipelago, Tachen island and Choushan archipelago on the north, and Tungsha islands and Nansha islands on the south. Located midway between Taiwan and Mainland China in the Taiwan Strait, Penghu possesses an important geographical position.

The Penghu archipelago consists of near one hundred islands. The land area totals about 127 square kilometers. The Makung Island (including Makung City and Hushi) is the largest island in the archipelago, followed by Hsiyu, Baisha. Only 20 islands are inhabited.