Located at the confluence of the Wabash, Patoka, and White rivers, Mount Carmel borders both Gibson and Knox counties of Indiana.

Mount Carmel is 5 miles (8.0 km) northeast of the Forest of the Wabash, a National Natural Landmark within Beall Woods State Park and about a mile north-northeast of one of its main employers, the Gibson Generating Station.

On June 4, 1877, a tornado of F4 intensity touched down just west of Mount Carmel and moved east-northeast, devastating the town.

[5] The storm's line of destruction wreaked havoc on a large part of the territory between Third and Fifth streets.

As described in a local newspaper at the time: "During its prevalence the air was filled with flying roofs, windows, doors, lumber, rails, clothing, etc.

Mount Carmel is located on the Wabash River, which demarcates the Indiana border.

for its once multicolored bridge over the Wabash River, painted white and black on the Illinois and Indiana sides of the state line, respectively.

It was felt widespread across southern Illinois and eastern portions of Missouri including St. Louis, 123 miles (198 km) away.

The small town atmosphere provides a laid back, comfortable setting in which international students may study English as a second language (ESL).

As part of the IECC, residents benefit from a reciprocal agreement where some of the out-of-state fees to attend the University of Southern Indiana are waived, in exchange for similar tuition discounts for Indiana students in IECC schools.

Their men's basketball team, the Warriors, won the NJCAA Division I championships in 2001.

[20] The situation has substantially improved since 1992, when the unemployment rate peaked as high as 15.1% with the loss of industrial jobs.

[21] Duke Energy's Gibson Generating Station is the nearest employer of substantial size.

The Gibson County, Indiana power plant is located less than a mile away from Mount Carmel, directly across the river.

On April 5, 2007, Foundation Coal Holdings, Inc., of Linthicum Heights, Maryland, announced plans to close the Wabash Mine in nearby Keensburg, Illinois, meaning a loss of nearly 230 jobs in Wabash County.

[citation needed] Mount Carmel lost 270 jobs in 2003 due to the closing of a Snap-on Tools factory, which had operated since 1937.