The town is located at the south eastern corner of the region, on the Niagara River, directly across the Canada–United States border from Buffalo, New York, and is the site of Old Fort Erie which played a prominent role in the War of 1812.

Fort Erie is one of Niagara's fastest growing communities, and has experienced a high level of residential and commercial development in the past few years.

Fort Erie is also home to other commercial core areas (Bridgeburg, Ridgeway, Stevensville and Crystal Beach) as a result of the 1970 amalgamation of Bertie Township and the village of Crystal Beach with Fort Erie.

After the war the territory of what is now the Town of Fort Erie was settled by soldiers demobilised from Butler's Rangers, and the area was named Bertie Township in 1784.

The Fort Erie area became a major terminus for slaves using the Underground Railroad (between 1840 and 1860); many had crossed into Canada from Buffalo, New York.

Bertie Hall (which was used for a time in the 20th century as a Doll House Museum) may have been a stopping point on the Underground Railroad.

Erie Beach featured a hotel, a casino, a race track, regular ferry service from Buffalo and train service from the ferry dock in Fort Erie, and what was billed as the world's largest outdoor swimming pool.

The ruins of Fort Erie remained until they were rebuilt through a depression era "work program" project, as a tourist attraction.

Fort Erie is optimally flat, but there are low sand hills, varying in height from 2 to 15 metres (6.6 to 49.2 ft), along the shore of Lake Erie, and a limestone ridge extends from Point Abino to near Miller's Creek, giving Ridgeway its name.

While summers are enjoyable, winters can occasionally be fierce, with many snowstorms, whiteouts and winds coming off Lake Erie.

In addition to the primary urban core of Fort Erie, the town also contains the neighbourhoods of Black Creek, Bridgeburg/NorthEnd/Victoria, Crescent Park, Crystal Beach, Kraft, Point Abino, Ridgeway, Snyder, and Stevensville.

Within Fort Erie, Highway 3 is named Garrison Road, and is the major east–west connection through the town.

The International Railway Bridge was built in 1873, and connects Fort Erie to Buffalo, New York across the Niagara River.

The nearest passenger rail stations are in Buffalo, New York and Niagara Falls, Ontario.

The lake and river serve as a playground for numerous personal yachts, sailboats, power boats and watercraft.

There is a marina at the site of a former shipyard at Miller's Creek on the Niagara River, and a boat launch ramp in Crystal Beach.

In order to reduce large-scale ice blockage in the Niagara River, with resultant flooding, ice damage to docks and other waterfront structures, and blockage of the water intakes for the hydro-electric power plants at Niagara Falls, the New York Power Authority and Ontario Power Generation have jointly operated the Lake Erie-Niagara River Ice Boom since 1964.

The boom is opened on April 1 unless there is more than 650 square kilometres (250 sq mi) of ice remaining in Eastern Lake Erie.