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The Port of Palacios is located at the mouth of the Palacios Boat Channel on Tres Palacios Bay, which is an inlet from Matagorda Bay, and is situated halfway between Bay City and Port Lavaca, Texas on SH 35. The City of Palacios is about 110 miles south of Houston. The Port covers over 124 acres of shoreline and has three turning basins with 11,318 linear feet of commercial dock. The Port of Palacios also encompasses over 600 acres of shoreline property and 300 acres of near shoreline property for development.
 

The harbor is home port for over 300 commercial shrimp boats, as well as transient commercial vessels from other ports in the Gulf of Mexico. Palacios is also home to a variety of other commercial vessels for fishing, scalloping and oystering. The Port contains two recreational marinas, and several shipyards, which can accommodate a wide range of requirements and special needs. These shipyards frequently dry dock, service, refit and repair vessels ranging from commercial and industrial barges and tugs, to shrimping and fishing vessels, as well as recreational vessels of all sizes.

As a commercial shrimping port, Palacios is currently ranked 2 nd behind the combined ports of Brownsville/Port Isabel, the difference being that Brownsville/Port Isabel is a deepwater port, whereas Palacios is a shallow draft port. Nationally, the Port of Palacios is ranked 48 th for tonnage. The Marine Fisheries Report for 2002 shows that the Palacios shrimp harvest was 15.1 million pounds. During that time, the Port of Palacios was ranked second among Texas fishing ports, 13th among all U. S. fishing ports and was the major food crop for Matagorda County, in front of rice and beef cattle production. The Port of Palacios is increasingly known as the “Shrimp Capital of Texas”.