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According to the United States Census Bureau , the city has a total area of 1.6 square miles (4.1 km 2 ), of which, 1.2 square miles (3.1 km 2 ) of it is land and 0.5 square miles (1.3 km 2 ) of it (28.48%) is water. Rehoboth Beach is bordered on the east by the Atlantic Ocean , on the north by the development of Henlopen Acres , and on the west and south by unincorporated portions of Sussex County. Cape Henlopen State Park lies just to the north of Rehoboth Beach, and Dewey Beach is just to its south.