The municipality is situated in Naturpark Thüringer Schiefergebirge-Obere Saale on the Hohenwarte-Stausee.

The operation of mills has shaped the small town on the Saale for centuries.

The Rudolstadt company Grosch & Zitkow built a cartonboard factory in Hohenwarte in 1904.

For the workers at the Hohenwarte pumped-storage hydroelectricity power plant new residential buildings were built.

Since the Die Wende, the town has been particularly affected by demographic change; the population more than halved.