Highland Village is located in southern Denton County, in the northern part of the Dallas-Fort Worth Metroplex. It is bordered by the city of Lewisville to the east and south, the town of Flower Mound to the west and southwest, and Lewisville Lake to the north.
The city sits in the transition zone between the Texas Blackland Prairies and the Cross Timbers ecoregions, meaning the natural landscape originally featured a mix of dense oak forests and open grasslands. The most defining geographic feature is its northern boundary along Lewisville Lake, a major reservoir on the Elm Fork of the Trinity River, which provides water, recreational space, and scenic views for the community.