A spring within the fort provided water supply to the ships that called there, giving it the name "Aguada" (meaning 'water' in Portuguese). On the northern side, it provides a harbour for local shipping. The fort, at present, houses the central jail. A 19th century built lighthouse is situated inside the fortress.

Immediately south of Candolim, a long peninsula extends into the sea, bringing the seven-kilometre white sandy beach to an abrupt end. Aguada Fort, which crowns the rocky flattened top of the headland, is the best-preserved Portuguese bastion in Goa. Built in 1612 to protect the northern shores of the Mandovi estuary from Dutch and Maratha raiders, it is home to several natural springs, the first source of drinking water available to ships arriving in Goa after the long sea voyage from Lisbon.