The Karakuri Island is an island somewhere in Paradise on which resides the Future Country Baldimore (未来国バルジモア,Mirai-koku Barujimoa?, Future Land Baldimore in the Viz Manga and FUNimation subs). It was first featured in Enel's cover story. This is where Dr. Tsukimi built his own automata. The country specializes in advanced technology, such as cyborgs and mechanical structures. As such, it is hailed as the "Future Country" and the birthplace of the genius, Vegapunk. After Bartholomew Kuma sent him to the island, Franky spent two years studying Vegapunk's technology.
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When Vegapunk lived on the island in his youth, he created a laboratory that housed many experiments, most of which were never finished. His lab and everything inside is considered a treasure of mankind and is more valuable than money, guarded by the Marines. Vegapunk modified the local animals into cyborgs, such as beetles, lions, gorillas, and snakes to use as a labor force to build an in-ground heating system for the island's people. He was never able to finish it due to his young age as well as a lack of the skills and funding necessary to make it a reality. It is visible from the island as two giant bolts lodged in the mountain. Because of this, the people found his kindness to be all the warmth they need.
At some point, Dr. Tsukimi built his own automata, Spacey, Cosmo, Galaxy, and Macro, while living on Karakuri Island. The five were enjoying dumplings while watching the moon. When part of it blew up, Tsukimi died and was buried by his automata there, and the four of them traveled to the moon vowing to avenge their fallen creator.
When Franky broke into the lab, he found the lab's self-destruct button and mistook it for a pirate symbol and pushed it. The lab and unfinished heating system promptly exploded in a giant mushroom cloud as a result. This incident would later be referred to by the rest of the world as the "Nightmare of Baldimore". This was later shown to have destroyed the skinny mountain with the two bolts sticking out of it.
After Franky escaped from the explosion, which burned off the skin on his face, he went into another portion of Vegapunk's laboratory revealed by the explosion, which was intact and contained many weapons-based inventions. He decided to live there to get stronger under Luffy's orders. Franky donned a tiger rug to cover his disfigured face, but accidentally set it on fire when embers from the nearby furnace landed on it. He ran out into the open area screaming. This gave him the appearance of a burning beast which the Marines investigating the earlier explosion saw, leading to another incident: the "Legend of the Sacred Burning Beast of Baldimore", which would be passed down through the Grand Line for generations.
To fit the cyborg theme, the highest mountain on the island has two giant bolts (much like Dr. Frankenstein's monster had on its neck). The bolts were a weather-controlling creation of Doctor Vegapunk, but failed to work.
The name of the island the country is on refers to Karakuri, a traditional Japanese mechanized craft wherein furniture and dolls come to life as if by magic.
In Enel's cover story, Karakuri Island is first introduced in katakana as "カラクリ島". However, later on when Karakuri Island is re-introduced in the main series, it is written in hiragana as "からくり島". It is unknown whether or not this difference is significant.