The town is located on the shore of the Kilsfjord, about 5 kilometres (3.1 mi) to the southeast of the villages of Vadfoss and Helle.

By the 1500, this area began to grow up as an important harbour for shipping timber from the vast forests of Telemark.

The town's business life was characterized by timber exports, shipping, and shipbuilding from then until the end of the First World War.

In addition to timber, later came shipping of wood pulp and products from quarries in the upland.

[4] On 17 August 1694, Christian Hansen Ernst was killed at the present-day Knivstikkersmauet ("knife stabber alley").