Magione borders the following municipalities: Castiglione del Lago, Corciano, Panicale, Passignano sul Trasimeno, Perugia, Tuoro sul Trasimeno, and Umbertide.

To the east is the Autodromo dell'Umbria, an operating automobile and motorcycle circuit of the national level.

The town was home to a magione (pilgrim house) built in the Middle Ages by the Knights Templar, hence the current name.

It was later owned by the Knights Hospitaller, who turned it into an abbey, which was fortified in the 14th century.

In 1502 it was the place where several Umbrian and Marche lords set a plot against Cesare Borgia.