The cape is actually a bend in Hatteras Island, one of the long thin barrier islands that make up the Outer Banks. The first lighthouse at the cape was built in 1803; it was replaced by the current Cape Hatteras Lighthouse in 1870, which at 208 ft is the tallest in the United States.
Oceanographically, it is of interest because it's a point of confluence for two opposing currents: the warm Gulf Stream moving north, and a cold Virginian current moving south. Somewhat analogous to Point Conception in Southern California, this on-the-edge placement leads to unusually diverse biological assemblages. Many species' ranges have either a southern or northern terminus at the cape.