Palau is situated in one of the most scenic ramifications of the north-eastern coast of Sardinia facing the Island of Maddalena. The village is particular for its coastline which has been modelled by nature and is unique in the world. The only embarkation point for the islands of the Maddalena Archipelago, the village also owes its fortune to the Sassari-Tempio-Palau narrow-gauge railway. Life rotates around the quays and berths of the tourist port. The origins of its name date back to the XIV century when the local fishermen indicated, the points of the coast which were considered as being the safest and the most sheltered from the winds, with the term ''parago'', hence ''Parao''. The headland of Palau, just like all the Archipelago of the Maddalena, was already known even at the time of the Greek geographer Ptolemy, who called this site ''Arcti Promontorio'' on his maps.
From Palau it is well worth visiting the most famous and fascinating place on the coast: the headland of Capo d'Orso, which ends in a huge rock sculpted by the wind into a shape which resembles the silhouette of a plantigrade. The “Punta Sardegna” can be reached by following the road that climbs towards Mount Altura and then descends towards the Cala Trana beach, at the end of the headland. The panorama from here is exceptional , even if the continual expansion of the built-up areas is ruining the beauty of these places. The “Batteria” of Mount Altura, in its panoramic position, is of incredible beauty and can be reached from the road that leads to Porto Raphael. The beauty of its beaches is furthermore balanced by the fascinating charm of the little centre. The visitor can also while away the night in one of the numerous nightclubs found in the village.