Butterfly Islands are a group of islands situated close to the large and uninhabited New Island in the south of Gallows Sound. The individual islands are a mix of grassland-covered islands and jungle-covered ones. An ancient civilization, now gone, once inhabited the islands and left eerie-looking grey ruins scattered about. Some of the ruins are now the home of the Twenty-One Butterflies that have made it into a village where they can be safe from both other pirates, Governor Johnson, and Admiral LeFevre.

Everywhere on the islands, butterflies fills the sky. At night, however, the butterflies hide and are replaced by moths, which have parasites on their wings that falls on anything or anyone below. The parasites turn people into wailers, which are mindless creatures of the night, filled with endless rage. Many wailers roam Butterfly Islands, making them a deadly place for the Twenty-One Butterflies to live.