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Arendal has gone from being a small southern village, based around seven small islands, to become the tenth largest town in Norway in terms of population. Other villages in the municipality include Tromøy, Rykene, Eydehavn, Strengereid, Kongshamn, Kilsund, and Hisøy.

Tromøybrua, Tromoey bridge

Tromøy island is located directly across the harbor from Arendal. Tromøy Bridge a 400 metre long suspension bridge connected it to the mainland in 1961. Galtesund separate the island Hisøy and Tromøy. There is a passenger ferry that takes six minutes to transport riders from Skilsø to Tyholmen. The highest point on the island is the 95 metre tall Vardåsen.

The company Aker Pusnes is located in Pusnes. It is a designer and supplier of all types of deck machinery and mooring systems for marine and offshore applications.