It is bordered by Rhinebeck and Red Hook to the west, Pine Plains to the east, Stanford to the southeast, Clinton to the south, and Gallatin to the north by Columbia County.

The only major route in the town is the historic Taconic State Parkway, though NY 199 serves as the main local thoroughfare.

A settlement 40 miles (64 km) south of Syracuse was originally called "Milan" in 1790 before incorporation in 1802 as the town of Locke.

[13] The main thoroughfares for the community ran from the Hudson River to Salisbury, Connecticut, and travelers referred to the road as the "turnpike."

In addition to farming and local mills in Milan, lead and iron were mined in areas around what is now Millerton, New York, and Salisbury, Connecticut, which was then brought to Livingston's furnaces at Ancram in Columbia County.

[14] It was the opening of the Erie Canal (1825) and then the development of the railroad and the move to river cities and the western migration that caused the decline.

Then following the 1930s and the Great Depression the population grew again, due in part to the construction of the Taconic Parkway, which ended in Milan at the time, and then the post-World War II boom.

New York State Route 199 runs east–west through the town of Milan, going to Red Hook and over the Kingston–Rhinecliff Bridge to the west.

The New York State Department of Environmental Conservation owns, manages and maintains two Multiple Use Areas in Milan.

[17] Dutchess County owns, manages and maintains the 615-acre (2.49 km2) Wilcox Memorial Park on Route 199, 3.4 miles (5.5 km) east of the Taconic State Parkway.

[20] In 2002 the Durst Organization, largely known for its high-rise developments in Manhattan, bought 2,300 acres (9.3 km2) that straddles the town of Milan and Pine Plains, with plans to create a second home and recreational community.

[22] By 2002 Red Wing Sand and Gravel of East Fishkill had bought two large parcels in the northern part of Milan (269 acres (1.09 km2) on Turkey Hill Road and 163 acres (0.66 km2) on Academy Hill Road) with a view to operating two large-scale mines.

But on March 30, 2010, the New York Supreme Court ruled in favor of the Town of Milan and its town-wide ban on mining.