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Dewey Beach is located at (38.948984, -75.037217), along the Atlantic Ocean coast of Delaware, on a barrier spit between Rehoboth Bay and the Atlantic Ocean. It lies within Sussex County with its eastern border following the Cape Henlopen State Park boundary line with neighboring Kent County to its east and south side bordering Fenwick Island to its west across Route 1 as it runs along Delmarva Central Railroad's Delmarva Subdivision rail line which separates Dewey from Bethany Beach to its north in adjacent Coastal Sussex County as well as Indian River Inlet separating Dewey from South Bethany in adjacent Northampton county further north on Route 1 while also sharing a short common border with neighboring Lewes at their southeast corner near Cape Henlopen State Park where they meet for less than . The town has an area of , including land that was added by annexation in 2013 bringing total area up to .