The river begins, as the Saalbach stream, in the Austrian state of Tyrol in the Kitzbühel Alps at the Torsee lake below the 2,178 m (7,146 ft) high Gamshag.

From there it flows initially eastwards through the Glemmtal valley, through Hinterglemm, then the ski resort of Saalbach – from that point it is known as the Saalach – until it bends north at Maishofen.

Crossing the border to Bavaria (Germany) at Melleck (part of Schneizlreuth) it flows along the northern slopes of the Reiter Alpe known for its climbing routes.

A short distance before Bad Reichenhall, a dam of a hydro-electrical power plant collects the waters of the Saalachsee [bar; de].

Having passed Staufeneck, the Saalach leaves the mountains and enters the flat forests called Saalachau.