Located on a steep hill, Signagi overlooks the vast Alazani Valley, with the Caucasus Mountains visible at a distance.

The name of the town comes from Old Turkic word of syghynak (Turkish: sığınak, Azerbaijani: sığınacaq), meaning "shelter" or "asylum".

In 1762, King Heraclius II of Georgia sponsored the construction of the town and erected a fortress to defend the area from marauding attacks by Dagestani tribesmen.

Signagi is situated in the eastern foothills of the Gombori Range, a watershed between the Iori and Alazani valleys, in a productive agricultural and fruit-growing region.

At an elevation of about 790 m above sea level, the town overlooks the Alazani Valley and faces the Greater Caucasus mountains.

Average annual precipitation ranges from 602.1 to 949.7 mm,[7] with the heaviest occurring during the spring months and early summer.

The venerated Bodbe Monastery is located 2 kilometers from Signagi and is a place of pilgrimage due to its association with St. Nino, the 4th-century apostle of Georgia.