The village is located along M-94 about 15 miles (24 km) southwest of the city of Munising.

It was named after Chatham, Ontario, Canada, the town where the lumber company Sutherland Innis was headquartered.

The first settler came to Chatham in 1896, when the Munising Railway Company (later Lake Superior and Ishpeming) established a line through the town.

According to the United States Census Bureau, the village has a total area of 2.45 square miles (6.35 km2), all land.

33.0% of all households were made up of individuals, and 18.6% had someone living alone who was 65 years of age or older.

The racial makeup of the village was 94.37% White, 4.76% Native American, and 0.87% from two or more races.

About 4.9% of families and 8.4% of the population were below the poverty line, including 4.7% of those under the age of eighteen and 20.0% of those 65 or over.