Onagawa is located on the rugged Sanriku Coast of north-central Miyagi Prefecture, with the Kitakami Mountains to the west and the city of Ishinomaki to the east, south and north.

Onagawa is a natural deep water port, located at the intersection of two major ocean currents and noted for its commercial fishing industry.

A memorial to Canadian Royal Navy Fleet Air Arm pilot Robert Hampton Gray who died in the attack, was unveiled in the town in 1989.

The tsunami reached in excess of 15 metres (49 ft) in height and swept 1 kilometre (0.62 mi) inland, claiming 827 lives and destroying 70% of the buildings in the town.

Six reinforced concrete buildings in the town of up to 4 stories in height were overturned by the force of the surging water and debris and Onagawa Station and its nearby railway tracks were also destroyed.

The local community's reconstruction efforts, in many cases led by Onagawa private sector business leaders, have outpaced many larger towns impacted by the 2011 Tōhoku earthquake and tsunami.

Within days of the disaster privately owned construction machinery were used to clear roads, a wholesale fish market was relaunched on 1 April and a reconstruction advisory board was formed shortly thereafter.

In the aftermath of the tsunami local residents successfully established small scale grocery stores and retail food facilities in a series of temporary market structures.

After extensive landscaping, new residential housing is being relocated at higher elevations on nearby hillsides and leftover soil is being used to raise industrial and commercial sections closer to the water an average of 4.5 metres (15 ft) above sea level.

The town acts as a processing and distribution hub for variety of sea foods, but is particularly known for coho salmon, pacific saury and the cultivation of oysters.