[7] Signal Mountain is located in southwestern Hamilton County at 35°8′N 85°21′W (35.1291, -85.3424), atop the south end of Walden Ridge.

According to the United States Census Bureau, the town has a total area of 7.7 square miles (19.9 km2), all land.

However, when various health epidemics struck Chattanooga in 1873 and 1878, several wealthy families relocated to the mountain where they could find clear air and pure water.

In the early 20th century, Charles E. James purchased 4,400 acres (18 km2) of land in the Signal Point area and developed the mountain.

In 1913, construction was completed of twelve miles (19 km) of streetcar track, which linked Chattanooga to Signal Mountain.

While the streetcars are no longer used, the tracks remain in the streets of Signal Mountain's historic district named after Velma.

[12] The Signal Mountain Playhouse presents two plays per year including an outdoor musical every summer in the natural amphitheatre behind the Town Hall.

The neighboring town of Walden hosts an outdoor public playground and pavilion called the Pumpkin Patch that is open for all to enjoy.