Diver's Isle is the small island where Alan Wake and Alice Wake stay on during their vacation to Bright Falls. The small island happened to be right next to Cauldron Lake. Alan and Alice stay in the cabin named Bird Leg Cabin after the shape of the island (when looked at from above) which is shaped like a bird's foot and leg.
- In the bedroom of the cabin there is a calendar that says July with the 4th highlighted, it is also dated 1970, the year the volcanic eruption destroyed the island.
- In front of the shed with the generator there is a stump that has the letters T.Z. and B.J. with a heart around them carved into the wood, this shows the romance that was on the island before Barbara Jagger drowned, the stump can be examined for some dialog.
- In Slavic folklore there is a witch-like woman named Baba Yaga who lived in a hut on chicken legs. She was a source of inspiration for Barbara Jagger and Bird Leg Cabin is a reference to Baba Yaga's house.