Located nearly 7 km (4.3 mi) southwest of the city centre, it is nestled within the central valleys of Penang Island and south of Air Itam.

Originally an agricultural village, rapid development in the last decades of the 20th century has transformed the area into a residential suburb.

[2] Similar to Ayer Itam to the north, Paya Terubong was where agricultural farms were established, providing fresh produce to be traded in markets elsewhere in George Town.

[2][4] In 2022, part of the Jalan Bukit Kukus Paired Road was opened for use, intended to alleviate congestion between Paya Terubong and other suburbs to the south.

[25][26][27] In 2024, Suiwah Corporation, a local retail firm, launched Sunshine Central, a 3.64 ha (9.0-acre) mixed-use development that includes a nine-storey shopping mall.