Peat Island is a small island in the Hawkesbury River, north of Sydney, Australia. It lies west of the Pacific Highway, in a suburb called Mooney Mooney. Originally called Rabbit Island, it was renamed Peat Island after George Peat, a local ship builder who established a ferry across the Hawkesbury River in the 1840s.

In 1911, a psychiatric hospital was established on the island. During the 1920s prisoners from the hulk Parramatta
were used in construction work on the island. The facility later became a hospital primarily for people with developmental disabilities. A causeway was built linking the hospital with the mainland. The New South Wales Government decided in 1998 to close all its large residential facilities and move the occupants into smaller community based housing facilities. In 2005-06, the Government announced it would be redeveloping Peat Island into village style accommodation for aged people.

In 2008 the Government announced that the Peat Island facility would be closed and residents moved to two new facilities on the Central Coast at Hamlyn Terrace and Wadalba.