Woody Island (inc. 1963; pop. 1991, 1) is a roughly rectangular island in northwestern Placentia Bay.

At the time of the first government census, in 1836, 93 people were living on Woody Island. A Church of England church was built by 1845 and a growing Methodist congregation had constructed a church by 1869. Apart from the cod fishery, the main industry was a herring fishery conducted in the Reach. In the late 1800s the lobster fishery spurred further population growth, from 128 people in 1891 to 237 in 1901. The population peaked at 341 in 1966, but a decline in the lobster, cod and herring fisheries had prompted many residents to look for work elsewhere.

In 1965 the government assistance program was changed, substantially increasing the sums available to move households and dropping a requirement that for removal assistance all residents would have to agree to move. Soon most residents had applied to resettle to nearby communities such as Arnold's Cove, Garden Cove, North Harbour and Swift Current. However, about 10 families decided to stay on the island, including that of merchant Alec Lockyer.

In the early 1970s Maclean's magazine published an article by Harold Horwood, extolling the virtues of Woody Island and lauding the pluck of the holdouts. Soon, a few outsiders arrived at the isolated island, including the Canadian folksinger Valdy (who attempted to start a commune) and Randy Lieb. While most soon left, Lieb stayed on the island, began farming and keeping small livestock, acquired a lobster license and became the community's postmaster. By the early 1980s there were only 10 residents, and 10 years later only Lieb remained. However, some lobster fishermen continued to fish out of shacks on the island. In the late 1980s some of these shacks were improved to become quite substantial cabins. By 1993 there were about 50 cabins on the island, as well as a "hotel" operated by Island Rendezvous Ltd., which offered overnight accommodations for tourists.