[4] Dawson is located in northern Fayette County at 40°2′52″N 79°39′31″W / 40.04778°N 79.65861°W / 40.04778; -79.65861 (40.047892, −79.658659),[5] on the north bank of the Youghiogheny River.

Pennsylvania Route 819 passes through the center of town, crossing the Youghiogheny into the unincorporated community of Liberty on the other side.

[4] Smiley Run joins the Youghiogheny River on the west side of the borough.

Dawson's only land border is with Lower Tyrone Township to the north, east and west.

Across the Youghiogheny River to the south, Dawson runs adjacent with Dunbar Township.

The land where Dawson was developed had belonged to John Smilie, who held multiple public offices in the government of Pennsylvania and was a member of Congress when he died in December 1812.

The Pittsburgh and Connellsville Railroad was located through the tract, and upon the opening of the line Dawson's Station was established at this point.

[11] Alfred Howell arranged for the tract to be duly surveyed and laid out into building lots, and so conducted his enterprise as in the course of a few years to erect a prosperous and desirable village, with churches, public schools, etc., upon what was before, and but for his business foresight and energy would have remained, merely an uninhabitable portion of an old farm.