The name "Two Peoples Bay" is from an incident in 1803 when an American whaling ship used the sheltered waters to lay anchor at the same time as a French vessel that was exploring the coastline east of Albany. John Gilbert, a naturalist, surveyed the area in the 1840s giving his name to the Gilbert's potoroo. Whaling activities were conducted in the bay during the middle of the 19th century. Two Peoples Bay was declared a nature reserve in 1967. A bush fire broke out on private land near the reserve on 12 October 2012 and a team of about 20 fire-fighters arrived to combat the blaze. Following a sudden change in wind direction a truck carrying two of the fire crew was engulfed in flames. The two DEC firefighters, both female, received terrible burns. One, 45 years old, received burns to 60% of her body and was admitted to hospital in critical condition; the other, 24 years old, had burns to 40% of her body and was also critical. Both were transferred from Albany via the Royal Flying Doctor Service to Perth. Three other fire crew were injured, a second truck was burnt out and over of bushland were burnt before the fire was contained later the same day. The older woman, Wendy Bearfoot, died in Royal Perth Hospital on 1 November as a result of her injuries. WorkSafe launched an investigation into the circumstances. In late 2015 a fire burnt through of the reserve destroying an estimated 90% of the Gilbert's potoroo habitat.
Facilities
Two Peoples Bay boasts unspoilt coastal scenery and is a vital area for threatened animal species. There are beaches with path access that are suitable for fishing, swimming and snorkelling. Facilities within the reserve include a visitors centre with information and audiovisual presentations, car parking on and off the beach near the barbecue area, a boat ramp, toilets, rubbish bins at the picnic area, gas barbecues, a water tap near the barbecue area and toilets, and seating. However, there is no drinking water available elsewhere and it is recommended that visitors need to take their own. There is an entry fee for the reserve. The biggest attraction in Two Peoples Bay Nature Reserve is Little Beach, which is popular with tourists, and consistently appears in TripAdvisor's top three attractions of the Albany area. Australia's beach expert Brad Farmer named Little Beach as #12 his 2018 list of Australia's top 101 beaches.
Flora and fauna
Plants
The vegetation that is found in the park can be classified as follows: low forest is found north of Moates Lake, the wetland margins and close to the reserve offices. The trees reach 15 m in height and are dominated by Eucalyptus species including coast gum, jarrah and yate as well as other species such as marri and juniper myrtle. The understorey of the low forest includes species such as swamp banksia, pea-flowered narrow-leaved water bush and the porungurup wattle. Low woodlands in the broad valleys north of Moates Lake mainly consist of Albany blackbutt and the area between Moates Lake and Gardiner Lake is mostly populated with swamp banksia. Dieback has eradicated a population of the threatened granite banksia.
Animals
Two Peoples Bay is home to Australia's most threatened mammal and one of the rarest animals in the world, the Gilbert's potoroo. This potoroo was thought to be extinct until the population at Two Peoples Bay was discovered in 1994. It is estimated that there are fewer than 40 individuals left in the wild. Other threatened mammals in the area include the southern brown bandicoot, western ringtail possum, Australian sea lion and the New Zealand fur seal. Quokkas are also known to inhabit the park and Two Peoples Bay is thought to be near the eastern limit of their range. Several reptiles can be found in the park including little brown snake, carpet python, beautiful skink and mournful skink.
The total area enclosed by the nature reserve is. It consists of three separate areas:
A section of that contains Mount Gardner, Lake Gardner, Moates Lake, rocky shoreline of Sinkers Reef, granite headlands, secluded sandy beaches such as Little Beach and Waterfall Beach and mobile dunes
A smaller section of that is about north of the main area that includes the northern portion of Angove lake and the Angove River
Four islands - Coffin Island, Black Rock, Inner Island and Rock Dunder