The island is one of a group of barrier islands north of the Arabian Gulf city of Ras al-Khaimah, and appears to have emerged originally as a sand bar. Surface geology is a combination of low mobile sand dunes and intervening patches of salt flats.
Important gatherings of sea birds, including gulls (Larus sp.) and terns (Sterna sp.) can be found along the shores and in the lagoon, in particular during the winter months.
The island appears to have emerged around 2,000 years ago, because the earliest evidence of human occupation dates to around the third century AD. Archaeological sites on the island have been found which indicate occupation ever since, with sites of particular importance dating to the Late pre-Islamic to early Islamic periods (c.sixth/seventh centuries AD). The main centre of occupation in the area then moved to the adjacent mainland, perhaps as a result of changes in the coastline, although Hulayla continued to be occupied, at least on a seasonal basis, until recent times.
The northern end of the island is now scheduled for eventual development as a Free Zone, although the major archaeological sites are to be preserved.