It is situated in the Rosental/Rož Valley of the Drava River, about 17 kilometres (11 mi) south of the Carinthian state capital Klagenfurt.

The municipal area comprises the cadastral communities of Ferlach (Borovlje), Kappel an der Drau (Kapla ob Dravi), Kirschentheuer (Kožentavra), Unterloibl (Podljubelj), Waidisch (Bajdiše), Unterferlach (Medborovnica), Glainach (Glinje), Seidolach (Ždovlje), and Windisch Bleiberg (Slovenji Plajberg).

Ferlach was first mentioned as Vörelach in a 1246 deed, named after the surrounding pine (Föhre, bor in Slovene) forests.

The relocation of the capital of the Duchy of Carinthia to nearby Klagenfurt under the rule of King Maximilian I about 1518 decisively promoted the development of Ferlach as a centre of firearm manufacturing.

The history of the town is depicted in its coat of arms: it features a pine tree with a cone, two crossed silver nails, and a rifle.