Grafing is in the Munich Region, about 32 km (20 mi) southeast of the state capital, where the Urtelbach and Wieshamer Bach both empty into the Attel River.

Nearby municipalities are the district capital Ebersberg about 4 km (2.5 mi) to the north, Glonn and Kirchseeon.

The town has the following traditional rural land units (Gemarkungen in German): Elkofen, Grafing b.München, Nettelkofen, Oexing and Straußdorf.

The town, founded about 960 as Gisling, belonged to the Munich Rentamt [bar; de; es] and the Swabian legal district in the Electorate of Bavaria.

In 1953 the united municipality received town privileges, and with regional reform in 1978, the former communities of Elkofen, Nettelkofen and Straußdorf were merged into it.

It is named after the Klostersee (lake) lying in the neighbouring town of Ebersberg where the first ice hockey games were held in the 1950s.