It is located on the western side of the Chaunskaya Bay, directly off the Nutel'gyrgym Peninsula, at the eastern end of the Kolyma Gulf. The island is 63 km long and 38 km wide. It is generally low and flat and there are many small lakes and swamps. Ayon Island is separated from the mainland by the Malyy Chaunskiy Strait, a shallow channel which is barely 2 km wide in its narrowest spot. The bay to the south and east is Chaunskaya Guba. Administratively and municipally, Ayon Island belongs to Chaunsky District, part of Chukotka Autonomous Okrug of the Russian Federation.
There are two small settlements, Elvuney (now abandoned) and Ayon in the northwestern end of the island.
The name of the island is thought to come from one of two sources. Firstly, it is suggested that it comes from the Chukchi word "Ayo", meaning "brain", as the islands shape is somewhat like a brain. The second school of though is that it is derived from Chukchi meaning "coming alive", in reference to the fact that although the island is covered in ice and snow during the winter, in the summer, this melts and the island provides a good pasture for reindeer herds as well as being the home to swarms of midges and gadflies.
Following the rise of communism in the Soviet Union in the first part of the twentieth century, the native herds were collectivised in 1933 into a group called "Enmitagino". Such collectivisation was very successful on the island and in 1950, the collective in Ayon was turned into a formal Kolkhoz that would eventually have around 22,000 reindeer under its control. In addition to reindeer herding, the new collective was also engaged in sea-hunting and the collection of furs.
A polar station was established on the site of the village in 1941 and the icebreaker Krasin brought Pyotr Sidersky and a crew of seven people to man the new station. This was the first time that the village site had been inhabited permanently, with indigenous people living there only during the summer when the reindeer were taken to pasture, with the exception of a few individuals who would over-winter in order to hunt.
By 1944, the settlement had become increasingly permanent and there were 103 people living in 23 houses.
However, following the collapse of the Soviet Union, state support was withdrawn and the herders, who had been used to being supplied with the latest technology by the state now found that not only did they have to fend for themselves with regards to the day to day herding, but that there was no guarantee that they would even receive the money they were owed for the meat they provided to the state.
The result of this is that the herds have shrunk from 22,000 to only around 4,000. the result of this is that there is considerable unemployment in the town. This has led to a lot of drinking, which not only has sociological effects, but the litter produced also encourages disease from which the reindeer now suffer, further reducing the size of the herd.