Ponta do Sol is located between Ribeira-Brava and Calheta, on the southwest coast of Madeira, linked to Funchal (the capital) and surrounding communities by the main regional road.

The municipality is crossed by a few pedestrian hiking trails, that usually follow the levadas (English: aqueducts) carrying water from the mountains.

Administratively, the municipal government is located in the civil parish (freguesia) of Ponta do Sol, while local government is handled through the three civil parishes: In the mid-twentieth century, many residents of Ponta do Sol and the surrounding communities on Madeira immigrated to the Netherlands Antilles, especially the island of Curacao.

This migration pattern began as both a reaction to the difficult economic conditions faced by many local residents of Ponta do Sol at the time and a response to the development of a Shell oil refinery on Curacao, which attracted immigrants from different parts of the Americas and further afield, including Portugal.

The service industry, particularly tourism, has carved-out a portion of the income stream, with high-quality hotels or residential inns located in the countryside and urban centres.