Colony Island is the smallest island in Liberty City, located in the southernmost part of the Humboldt River between Algonquin and Broker. Access to the island is very limited, and the island contains a limited population. The island primarily consists of a single apartment complex and industrial complex with many undeveloped areas.
Colony Island is well known in the myth hunting community as one of the game's densest area for myths and legends. The single road leading to the island is known as Leaper's Bridge because of canon mentions of suicides happening at the bridge, and fan rumors claiming suicidal pedestrians can be spotted during regular play. At the south of the island lies the Abandoned Hospital ruin. The Abandoned Hospital's presence on the island has been blamed as causing a haunting on the island, with the hospital's ghosts not only being sighted in the building itself, but also across various areas of the island and ghostly possessions being blamed for suicides at Leaper's Bridge. At the north of the island is another location linked with multiple deaths, the Colony Island Cemetery. Many myths are reported at the cemetery, primarily the Colony Island Killer and Kate McReary's Ghost. Other minor paranormal behaviors are also said to occur at the cemetery.