The small beach of Praia do Castelo is located on the wonderful stretch of coast between Albufeira and Armação de Pêra. There are a number of small bays along the several kilometres of coast here, all of which have the same ochre coloured sandstone cliffs eroded into various rock formations.

At the easternmost end, a scenic rock formation reminiscent of the battlements of a fantasy castle, give the beach its name. These days there is no recognisable castle here but the name refers to a 16th century watchtower that once stood here to protect the coast from the attacks of Barbary pirates from North Africa. There are actually some remains of the old watchtower near the entrance of the beach.