Treasure Island is the titular location in Muppet Treasure Island, though it is never specified by name in the film. In the original Robert Louis Stevenson novel, the text indicates that the island is in the vicinity of the Spanish Main, or Atlantic Ocean, the historically dominant region of piracy. The tropical island is home to such fauna as crocodiles, mosquitoes, and monkeys, and the native population consists of a tribe of boars, led by high priest Spa'am. An unusual natural occurrence is a collection of large stone heads, carved in the likenesses of pigs, much like those found on Easter Island. The heads occasionally participate in native chants or crack jokes to marooned sailors. Benjamina Gunn is a more recent inhabitant, marooned by Captain Flint, and subsequently presides over the natives as their queen, accompanied by her pet anteater, Flaubert.

Prior to the film's narrative, Captain Flint selected the island as the place to bury his treasure. The Crew of the Hispaniola re-discover the island, thanks to Jim Hawkins' map. The map marked such features as the tree where the dead men hang. The island carries a general atmosphere of both exotic hope and supernatural danger, preying on the superstitious nature of the pirates. Other topographical features include the sandy beach front, lush palm forests, and cliffs suitable for dangling captive amphibious sea captains and their lady pig friends. Cultural ceremonies, which attract a lively tourist interest, include the native war chants, swashbuckling pirate melees, and rousing impromptu musical numbers.