It is about halfway between Dunedin and Gore on the Main South Line railway, State Highway 1 and the Southern Scenic Route.

Known locally as "Clutha", Balclutha's name – and that of the river on which it stands – reflects the Scottish origin of the town's settlement.

James McNeil from Bonhill, Dumbartonshire, Scotland, who is regarded as the town's founding father, arrived in 1853, via Port Chalmers in 1849.

It provides the town with various recreational facilities, including fishing (brown trout), water skiing and power boating.

The South Island Main Trunk Railway crosses the river some 800 metres downstream, near the junction where the Clutha River divides into the southern branch, known as the Kaoru (pied shag), and the northern the Matau (derived from Mata Au, the Maori name for the Clutha).

Nearby at Benhar / Kaitangata is Lake Tuakitoto, and Matai Falls, a natural waterfall and scenic feature is in the Catlins.

[8] The yellow-eyed penguin comes ashore for breeding in the Balclutha area at the edge of the Catlins, and The Nuggets are located at nearby Kaka Point.