The Misty Palisades is the home to both the Dragons of Enchancia and the Sea Serpents of Enchancia.
It first appears in The Curse of Princess Ivy as the Blazing Palisades. Princess Ivy arrived on the island to find Everburn the Elder Dragon to get him to destroy the Amulet of Avalor since his dragon fire is the only thing powerful enough to do so. Princess Sofia, Princess Amber, and Cedric arrive to stop her from doing so. After the trio reveal Ivy's true nature to them, the dragons help Sofia who becomes their friend.
The Palisades reaches its present state in "The Secret Library: Tale of the Eternal Torch". The Sea Serpents of Enchancia, who have always wanted to claim the Palisades as their home, arrive on the island with the Forever Fountain. Sofia showed up to help the Dragons stop them but Prince James, who Sofia unintentionally brought along, wrecks their plans in a way that enables the Sea Serpents to succeed in putting the Forever Fountain on the Eternal Torch's pedestal and turned the Blazing Palisades into the Watery Palisades. Sofia and James put the Eternal Torch back on its pedestal in a way that merges the magic of the two items and turned the Palisades into its current state.