[5] Located in the western part of the Willamette Valley, Sheridan is at the base of the Northern Oregon Coast Range along the South Yamhill River.

Sheridan lies west of the county seat of McMinnville, along Oregon Route 18.

This highway and Oregon Route 18 Business run east–west through Sheridan and nearby Willamina, parallel to the river.

The main events each year in town are Sheridan Days and the Mud Drags, both held in June.

[6] The Sheridan post office was established on April 4, 1866, with Absolem's brother Thomas serving as postmaster.

[6] In October 1878, the Dayton, Sheridan and Grand Ronde Railroad, a narrow-gauge railway, reached the community.

[6] Sheridan, a timber and farming community southwest of Portland and northwest of Salem, was incorporated in 1880.

[7] By 1894, Sheridan had grown to 400 residents, one bank, two hotels, three churches, and a flouring mill.

The action was successful and the workers won a pay increase of twenty-five cents per day,[10][11] equivalent to $8.18 in 2023.

With funds received through the Works Progress Administration, the current steel bridge across the South Yamhill River was built and opened in 1939.

[15] The state built a bypass around Sheridan and Willamina that opened in 1957 to carry Oregon Route 18 on the south end of the city.

[7] Sheridan moved its city hall into the old railroad station in January 1993,[19] and expanded the renovated building in 1995.

[21] This error of about 2000 people was enough to throw off the state legislative districts beyond their margin of acceptance and the Oregon Supreme Court ruled the Secretary of State must re-draw the boundary lines to match the correct data.

Sheridan is located in the western part of the Willamette Valley at an elevation of 189 feet (58 m) above sea level.

Other communities include Ballston to the southeast, Shipley due west, Red Prairie to the south, the Gopher Valley to the north and east, and Bellevue to the northeast along Oregon 18.

Sheridan, as part of the Willamette Valley, is within the Marine west coast climate zone.

Summers in there are generally warm, but temperatures year-round are moderated by a marine influence from the Pacific Ocean.

[26] The city receives most of its precipitation during the mild to cool winter months, with the wettest period from November through March.

[26] Sheridan's average annual precipitation totals 47.16 inches (1,198 mm), with the wettest month coming in December.

[25] The business route, also known as Main Street, runs through downtown on the north side of the South Yamhill River and connects to Shipley and Willamina, to the west.

Oregon Route 18 connects to McMinnville, the county seat, and beyond to the Portland metropolitan area to the east.

[31] The economy of Sheridan includes agriculture, timber, manufacturing, and service sector employment.

[25] The commercial district is centered on Bridge and Main streets, with their intersection as the location of the only traffic signal in the city.

[34][35] City police protection is provided under contract by the Yamhill County Sheriff's Office.

[33] Sheridan operates its own water and wastewater treatment systems, both built in 1949.

[25] Drinking water comes from the South Yamhill River and from springs on Stony Mountain to the north.

[25] The city hosts two main annual events, Sheridan Hometown Days and the Mud Drags.

[56] Most events are held at the high school and includes carnival type activities and rides.

[57] The Mud Drags are held in early June and sponsored by the local Rotary International group.