[3] Aglayan is bounded to the north by Laguitas, Magsaysay, and Mapayag; to the east by Linabo; to the south by Violeta and Cabangahan; and to the west by Bugcaon and Capitan Juan in the municipality of Lantapan.

Due to its strategic location at the crossroads of Northern Mindanao, Aglayan is a prospective center of commerce and a transportation hub of Malaybalay.

Aglayan serves as a first distribution point of agricultural and fishery products for the city of Malaybalay and the entrance to the Basakan District and the municipalities of Cabanglasan and Lantapan.

The area of what is now Aglayan was first inhabited by the Higaonon people and eventually became a sitio of Barrio Malaybalay of the pueblo of Oroquita del Interior in 1877.

[4] As a regular barangay, Aglayan has experienced growth in population and economy as it became a hub of transportation and commerce in the city and the province.