It has a harbor protected by breakwaters, being the port city for the productive mining district centering on Copiapó to which it is connected by the first railroad constructed in Chile.

The climate is mostly warm and extremely dry, because of its location on the Atacama desert's coast, but the temperatures are moderated by the cooling sea currents.

[3] On 31 August 1420, the territory where the city is currently located, was shaken by an 8.8 to 9.4 mega-earthquake, the first major earthquake recorded in the history of Chile.

In 1687, Englishman Edward Davis reached the Playa Bahia Inglesa 6 km (4 mi) south of Caldera.

As a commune, Caldera is a third-level administrative division of Chile administered by a municipal council, headed by an alcalde (mayor) who is directly elected every four years.