Townsend is situated in Tuckaleechee Cove, one of several "limestone windows" that dot the northern base of the Smokies. These windows form when erosional forces carry away the older rocks (mostly sandstone), exposing the younger rock below (i.e., limestone). Limestone windows are normally flatter than other mountainous valleys, and are typically coated with rich, fertile soil. Other limestone windows in the area include Cades Cove, Wear Cove, and Jones Cove.
Tuckaleechee Cove is situated between Bates Mountain to the north and Rich Mountain to the south, with the cove's greater population estimated at around 1,500. Little River, its source high in the mountains on the north slopes of Clingmans Dome, slices east-to-west through Tuckaleechee and drains much of the cove. The city of Townsend dominates the eastern half of Tuckaleechee.