Baileys Harbor Boreal Forest and Wetlands contains a unique and diverse landscape, influenced by the local climate along the northeastern coast of the Door Peninsula. Cooler springs and summers, warmer falls and winters, and reduced evaporation rates have allowed northern species and a boreal forest to thrive here, far south of their normal range. Balsam fir and white spruce dominate the forest, which grades into northern wet-mesic forest of white cedar, white pine, paper birch, and hemlock. Many orchids and rare plants find refuge in the forest, including the federally-threatened dwarf lake iris (Iris lacustris).

The natural area protects over 1.5 miles of undeveloped Lake Michigan shoreline. An extensive alkaline rockshore, or bedrock beach, is exposed during periods of low lake levels. Bird's-eye primrose (Primula mistanssinica), small fringed gentian (Gentianopsis procera), and tufted hair grass (Deschampsia cespitosa) are among the uncommon species thriving on the open dolomite flats.

The forested communities support a wide variety of birds associated with boreal habitats, including yellow-bellied flycatcher, Blackburnian warbler, and merlin. Migratory shorebirds and waterfowl are attracted to the undeveloped shoreline. This area is one of the few known nesting sites in Wisconsin for the common goldeneye, a diving duck that nests in forest tree cavities.

Baileys Harbor Boreal Forest and Wetlands is owned by the DNR and was designated a State Natural Area in 1995.