Blue Grotto With its gorgeous blue water, Blue Grotto is one of the most well-known sea caves in the world. It is located off the coast of the island of Capri, Italy. Guided boat tours are readily available so you can witness the cave for yourself. The opening to the cave is so small that passengers must lie down on the boat as the guide pulls the boat inside. As a result, inclement weather and high waves can thwart attempts to see the cave.