Castel Bay is a Canadian Arctic waterway in the Northwest Territories. It is a southern arm of M'Clure Strait on northeast Banks Island. The mouth of the larger Mercy Bay is less than 20 km (12 mi) to the east. These bays are a part of Aulavik National Park.

It is named by Vilhjalmur Stefansson in honour of Arctic explorer Aarnout Castel.