The city is located on Route 54 in southern Colonia, 43 kilometres (27 mi) (by road) east of the city of Colonia del Sacramento, and 150 kilometres (93 mi) west of Montevideo, the country's capital.

Juan Lacaze has coasts over the Río de la Plata basin.

The Arroyo Sauce (or Arroyo del Minuano) flows west of the city and the mouth of Rosario River is about 10 kilometres (6.2 mi) to the east.

On 15 March 1920, the populated area situated at the "Puerto del Sauce" was declared as "Pueblo" (village) by the Act of Ley Nº 3.433.

On 17 August 1920 its status was elevated to "Villa" (town) by the Act of Ley Nº 7.257 and finally elevated to "Ciudad" (city) on 8 May 1953 by the Act of Ley Nº 11.934.