It borders Shaanxi province across the Yellow River to the west, Jinzhong and the provincial capital of Taiyuan to the east, Linfen to the south, and Xinzhou to the north.

However, the discovery of coal, iron, and aluminum deposits incentivized economic investment and population growth in the region.

There were plans to build a new business district in Lüliang, strongly supported by then-mayor Zhang Zhongsheng.

However, in 2014, the GDP declined by 2%, and by 2015, due to a slowing economy, plans in Lüliang stalled and many apartment blocks were left unoccupied.

Lüliang has direct jurisdiction over 1 district, 2 county-level cities, and 10 counties: Lüliang has a monsoon-influenced continental climate, that, under the Köppen climate classification, falls on the borderline between the semi-arid (Köppen BSk) and humid continental (Dwa) regimes, and features large diurnal temperature variation.