Karuah River is a drowned river estuary that rises on the south-eastern slopes of Gloucester Tops, south-west of Gloucester, and flows generally south-east and south before reaching its mouth within Port Stephens at Karuah. The river descends 600 metres over its 101 kilometres course. The river was first surveyed in 1795 as part of a wider survey of Port Stephens and, in 1811, was initially named Clyde by Governor Lachlan Macquarie. The name was subsequently changed to Karuah, believed to be a Worimi Aboriginal word meaning "native plum tree", although there is some debate with other sources insisting it means "plenty of fish", "fast flowing water" or "big water hole".
The settlement at the mouth of the river was originally named Sawyers Point before also being renamed Karuah. The Karuah Bridge was constructed in 1957 as part of the NSW Department of Main Roads policy of replacing ferry crossings where possible. It was the first steel truss bridge in Australia and used high strength steel bolts instead of rivets. The aluminium anti-corrosive coating used was also innovative in bridge construction at the time. The steel for the trusses was imported from England. The town and the bridge were bypassed in 2004.
Karuah town features a heritage walk that tell the story of the early history of the town and the district. Near the Karuah River Bridge are the remains of the original Ferry Master's Cottage. They can still be seen at low tide. The hut was built around 1918 by Jack Dillon and was occupied by the Ferry Master, George Neil, and his wife, in 1923. The Neil family remained in the house until 1970. It was destroyed by fire sometime later.
Karuah National Park adjoins the Karuah River to the east, Wallaroo State Forest to the south and freehold land on the other boundaries. The Park was formerly Karuah State Forest (reserved in 1914) until reserved as Karuah Nature Reserve in 1999, and then reclassified as National Park in 2007. The Park comprises two separate portions of land: the larger portion covers 701 hectares and is located three kilometres east of Karuah; the smaller portion covers 123 hectares and is located 15 kilometres north of Karuah. The Karuah Wetlands Board Walk is located next to the Karuah Visitor Information Centre and heads north into the Karuah Wetlands, a mangrove area beside the Karuah River which is home to migratory birds, koalas, wallabies and other marsupials. There are also stands of spotted gums, ironbarks and bloodwoods.