From A Wiki of Ice and Fire
Blackwater Bay is an inlet of the narrow sea, separated from it by the Gullet, held between the arms of Crackclaw Point to the north and Massey's Hook to the south, with the island of Dragonstone guarding the entrance to the bay. Elements of the Iron Throne's fleet patrol the bay and ensure it is kept free from piracy.
Aside from King's Landing and Dragonstone, the largest port on the bay is Duskendale, which serves as a secondary port for King's Landing when the main port is overwhelmed with traffic. Rook's Rest is located on the northern shore of the bay and Sharp Point is to the east on a narrow peninsula. The kingswood extends along the southern shore of Blackwater Bay, with the Wendwater flowing into the bay. The largest island is Driftmark, the seat of House Velaryon.
During the Dance of the Dragons, the blacks blockaded Blackwater Bay by closing the Gullet with the fleet of House Velaryon. The greens eventually defeated the blockade in the Battle of the Gullet, however.
A Clash of Kings
The Battle of the Blackwater occurs at the mouth of the Blackwater Rush where it meets the bay. This battle pits the forces loyal to Stannis Baratheon against those loyal to Joffrey Baratheon. Tyrion Lannister, the acting Hand of the King at the time, devises a system with a chain boom pulled across where the river widens into the bay. This chain is raised once the majority of Stannis's fleet is up river and wildfire is deployed to ignite many of the ships. The current pulls these burning ships towards the mouth of the river and against the chain, which results in the destruction of much of the fleet. Salladhor Saan's galleys remain outside of the chain in the bay.
A Storm of Swords
References and Notes