The island of Shalott sits in the midst of a river that is filled with copious amounts of waterlilies and daffodils. There are willow trees and aspen, and on the island itself is an imposing structure made of four walls and four towers, all in gray. Surrounded by flowers, the building houses the Lady of Shalott; it is her home, but it is also her prison. The speaker of the poem says that the little island is "all inrail'd / With a rose-fence" that is covered with roses. It is a beautiful prison, then, but a prison nonetheless.

The island, in addition, is located just up the river from the fabled town of Camelot, the legendary home of King Arthur and the Knights of the Round Table. The town of Camelot is also where the handsome Sir Lancelot, one of these knights, lives.

The road beside the river in which the island of Shalott is located leads, also, to Camelot. In fact, the Lady of Shalott can look into her mirror and see Camelot outside; she sees the girls going to the market and the knights walking in pairs and the young lovers newly wedded. This is how she is able to glimpse Sir Lancelot one day. When she looks out the window, drawing down the curse's effects, she knows she will die. For this reason, she lies down in a boat, knowing it will drift down the river into Camelot.