It neighbors the German municipalities of Bad Elster to the southeast, Adorf to the northeast, Eichigt to the north, Regnitzlosau to the west, and Rehau to the southwest.

The highest point is the hill Studánecký vrch at 697 m (2,287 ft) above sea level.

The first verified written mention of Hranice dates to 1413, when the town was bought by the House of Zedtwitz.

At the end of the 14th century, the Neippergs ran into financial trouble and sold the town.

[3] In the 1930s, a group of Sudeten German settlers from Hranice immigrated to Chile and founded the settlement of Puyuhuapi, where they lived and intermarried with Mapuches from Chiloé Archipelago.