The area of Hol was separated from the municipality of Ål in 1877 to become a separate municipality. In 1937 a part of neighboring Uvdal with 220 inhabitants was moved to Hol municipality. The area of Dagali was transferred from Uvdal to Hol in 1944. In 1962 Uvdal was reunited with Nore to form the new municipality of Nore og Uvdal.
Hol is bordered to the north by Lærdal, to the north and east by Ål, to the south by Nore og Uvdal, and to the west by Eidfjord, Ulvik and Aurland. Hol is a mountainous area, where over 90% of the area is at an altitude exceeding 900 meters above sea level. The Hallingskarvet mountain range is the highest point in the municipality, at 1933 meters above sea level. The Usta or Usteåne River flows northeast from Lake Ustevatn traveling down the Ustedalen valley. The Hallingdalselva River is formed by the confluence of the Usta River and the Holselva River from Lake Strandavatnet.