The townsite of Margaret River is located in the heart of the south west capes region of Western Australia in the valley of the Margaret River. It is located eight kilometres directly inland from where the Margaret River meets the magnificent coastline of the Indian Ocean which has worldwide fame for its surf breaks. The surrounding area is the Margaret River Wine Region and is known for its wine production and tourism, attracting hundreds of thousands of visitors annually.

The central business precinct of the town provides all the major services for the surrounding satellite towns of the Cape, including the local governing shire offices. The town has four Primary Schools, an independent High School and a tertiary campus. There are also major sporting and community facilities, restaurants, cafes, bars, specialty shops, three bakeries, three supermarkets, a Light Industrial Area and commercial precinct, a District Hospital, several doctors' surgeries, a nursing home, aged care facilities and a wide range of allied health services.

Suburban residential blocks immediately surround the townsite and extend out to land estates of Riverslea, Margaret Fields, Basildene, Darch Brook, Rapids Landing and Brookfield. These blocks range in size from village size lots and units up to more spacious holdings of approximately an acre. Further afield, the town is surrounded by Rural Residential & Lifestyle properties in the areas of Kevill Road, Caves Road, Leeuwin Escape, Wilderness, Burnside, Kilcarnup, Glenellie and Redgate. These attractive large lifestyle lots range from one hectare up to approximately four hectares. Large rural farms are prevalent in the areas of Rosa Brook, Rosa Glen, Burnside, Metricup and Wilyabrup where the lush topography, high winter rainfall and rich soils support large holdings of dairy farms, agricultural crops, cattle and sheep grazing and world renowned vineyards.