The Old Norse form of the name is Botnsfjorðr. The first element is the genitive case of botn which means "the innermost part of a fjord".

The municipality is situated on the north-eastern coast of the peninsula of Varangerhalvøya. Previously, there were several villages along this barren coast, but today everyone lives in the town of Båtsfjord, with a sheltered situation at the end of the Båtsfjord inlet. Båtsfjord Airport is a new, modern airport, and the Hurtigruten (coastal express ferry) has a scheduled stop at Båtsfjord.

The most interesting attraction is Hamningberg, an abandoned fishing village on the outer coast, with well-preserved 19th century wooden houses, a unique example of old architecture in a county so devastated by World War II. Now it is used for summer stays.

The municipality covers an area of 1,433 square kilometres (553 sq mi) including Finnmark's highest mountain pass over Ordofjell at 400 meters above sea level. With the Barents Sea pounding the rocky coastline, Båtsfjord is at the mercy of the elements, but it is a great place to visit with the worlds northern most Gannet colony to be found on the stack at Syltefjordstauran. The two pairs that were discovered in 1961 have now grown to well over 300 pairs. The Northern Gannet is just one of many species that can be seen.