The town is located within the Bishoftu volcanic field, an area of Holocene lava flows, cinder cones, tuff rings and maars.

Bishoftu is also home to the Ethiopian Air Force and the Harar Meda Airport (ICAO HAHM, IATA QHR), as well as a station on the Addis Ababa–Djibouti Railway.

Bishoftu, a town located in the Oromia region of Ethiopia, enjoys a temperate climate that is relatively mild compared to other parts of the country.

Nestled at an elevation of around 1,900 meters (6,200 feet) above sea level, Bishoftu benefits from cooler temperatures year-round, making it a pleasant escape from the heat of the lowlands.

In contrast, the dry season brings clear skies and warm, sunny days, though temperatures remain comfortable, rarely reaching extremes.

This balanced climate, coupled with the town's picturesque lakes and rolling hills, makes Bishoftu an inviting destination for both residents and visitors.

At about 1 kilometre (0.62 mi; 0.54 nmi) from Adda, on land that had been owned partly by Emperor Haile Selassie I, the Italians started Azienda Agraria di Biscioftu dell'Opera Nazionale per i Combattenti on 15,000 hectares, intending to create a center of colonization as well as an experimental agricultural station.

The initial group of 19 Swedes under Count Carl Gustaf von Rosen, who were to train the pilots and support personal, arrived there after leaving Sweden between 9 January and 16 July 1946.

Six Saab 91 Safir training airplanes were bought in Sweden and flown to the new airbase 24 December 1946, and on 10 November 1947, a fleet of 16 Saab-built B-17s were landed at Bishoftu by Swedish pilots.

The Animal Health Assistants Training School was established in Bishoftu in 1963, with financial support by the United Nations Special Fund.

According to the Nordic Africa Institute website, other major businesses in Bishoftu include the Ada Flour and Pasta Factory, the Pasqua Giuseppe PLC, the Salmida Leather Products Manufacturing, Ratson (Women Youth Children Development Programme), and Winrock International Ethiopia.