Island in the Sky is an island that only appeared in the episode "The Clash of Triton." Triton was locked there in a cage by his father, Neptune. Neptune locked him there for thousands of years until he learned to become a proper god. SpongeBob and Patrick went there to free Triton so Neptune could see him for his 5,000th birthday.
Much about the island is unknown or unexplored but many of its features are shown. But there is a cage where Triton is trapped in with a lock on the cage door. Also there is a bus stop on the edge of the island where people can enter/exit the island. Even there is a phone booth right across from the cage. There is a jungle at the back of the island. There is a mountain next to the jungle.
The Island in the Sky may be a parody to Angel Island from the Sonic the Hedgehog series which is also an island that floats in the sky.