The Keys are in the subtropics between 24 and 25 degrees north latitude. The climate and environment are closer to the that of the Caribbean than South Florida, though unlike the Caribbean's volcanic islands, the Keys were built by plants and animals.

The Upper Keys islands are remnants of large coral reefs, which became fossilized and exposed as sea level declined. The Lower Keys are composed of sandy-type accumulations of limestone grains produced by plants and marine organisms.

The natural habitats of the Keys are upland forests, inland wetlands and shoreline zones. Soil ranges from sand to marl to rich, decomposed leaf litter. In some places, "caprock" (the eroded surface of coral formations) covers the ground. Rain falling through leaf debris becomes acidic and dissolves holes in the limestone, where soil accumulates and tree roots find purchase.

The climate is subtropical and the Keys are the only frost-free place in Florida. There are two main "seasons": hot, wet, and humid from about June through October, and somewhat drier and cooler weather from November through May. Many plants grow slowly or go dormant in the dry season. Some native trees are deciduous, and drop their leaves in the winter or with spring winds.

The Keys have distinctive plant and animals species, some found nowhere else in America, as the Keys define the northern extent of their ranges. The climate also allows many imported plants to thrive. Nearly any houseplant known to commerce, and most landscape plants of the South, can thrive in the Keys climate. Some exotic species which arrived as landscape plants now invade and threaten natural areas.

Some plants that seem to define the Keys are not native, including coconut palm, bougainvillea, hibiscus, and Papaya.

The well-known and very sour Key lime (or Mexican lime) is a naturalized species, apparently introduced from the Yucatán Peninsula of Mexico, where it had been previously been introduced from Malaysia by explorers from Spain. The tree grows vigorously and has thorns, and produces golf-ball-size yellow fruit which is particularly acidic (even in highly alkaline coral sand soil) and uniquely fragrant. Naturally, Key lime pie was invented here as well.

The Keys are also home to a unique species called the Key deer, protected by the National Key Deer Refuge. About 70 miles (110 km) west of Key West is Dry Tortugas National Park, one of the most isolated and therefore well-preserved in the world. The name derives from the fact that the small hump-shaped islands look like dry tortoise (tortuga in Spanish) shells from a distance.