According to the United States Census Bureau, the town has a total area of 0.27 square miles (0.7 km2), all of it land.

[1] Virginia State Route 9 (Charles Town Pike) is the only primary highway passing through Hillsboro.

To the southeast, SR 9 connects with Virginia State Route 7, which continues southeastward to Leesburg and Alexandria.

Early settlement in this area was stimulated by the growth of population in Pennsylvania of Germans and Quakers seeking religious freedom.

Looking south for new, fertile lands to farm, many Quaker families migrated to the Loudoun area and had a significant impact on its development.

[7]Although there were mills and houses in the Gap in the late 1700s, the town of Hillsboro (spelled Hillsborough until its 1880 incorporation) was not formally established until December 31, 1802 by an act passed by the Virginia General Assembly.

12 on the town plat at auction for $88.50 paid to the trustees, he was required to build ‘a House thereon Twelve feet Square or equal thereto with a Stone or Brick Chimney to the same and a Shingle Roof on it within Four years of the Day of the Sale of the said lott.’ Due to its favorable location on the Vestal's Gap Road, the town grew quickly and in the early 1800s was one of the leading trade centers of western Loudoun, along with Snickerville (Bluemont) and Woodgrove, which has since disappeared.

[8][9]During this period there typically were three or four doctors in town, five or six general stores, a large tanyard and cooper shop, two shoemakers and three taverns.

However, the newly constructed railroads and turnpikes bypassed Hillsboro, drawing trade and commerce away from the town.

During the post-Civil War period, Hillsboro began its transformation from a busy commercial center to a primarily residential community.

Originally named Locust Grove Academy, the oldest part of the building, the east wing, was built in 1874.

In June 2021, Hillsboro completed ReThink9, a $30 million infrastructure project which included creating two roundabouts on State Route 9 east and west of the town, traffic-calming streetscaping, burial of all overhead utilities, a new safe drinking water system, wastewater management infrastructure as well as an underground stormwater management system.