The city is situated along the 45th parallel about 12 miles (19 km) northeast of Salem, in the eastern margins of the broad alluvial plain of the Willamette Valley.

The community of Milford was founded in 1846 with a sawmill, store and several other buildings two miles upstream from the present location of Silverton.

In historical times, the region was dominated by the Kalapuya and Molala peoples, whose seasonal burns of the area made it plow-ready and attractive to early 19th century Euro-American settlers.

[6] Silverton is part of the Salem Metropolitan Statistical Area, and the population core of the Silver Falls School District.

Abiqua Creek also empties into the Pudding River; it flows across the eastern valley north of Silverton, further draining the land around the city.

[7] The agricultural richness of the environs is due to massive and repeated floods from prehistoric Lake Missoula in western Montana.

Beginning approximately 13,000 years before the present, repeated flooding from Lake Missoula scoured eastern Washington and Oregon, carved out the Columbia River Gorge, and periodically swept down the Columbia River; when floodwaters met ice jams in southwest Washington, the backed-up water spilled over and filled the entire Willamette Valley to a depth of 300 to 400 feet (91 to 122 m) above current sea level,[8] creating a body of water known as Lake Allison.

The gradual receding of Lake Allison's waters left layered sedimentary volcanic and glacial soils to a height of about 180 to 200 feet (55 to 61 m) above current sea level throughout the Tualatin, Yamhill and Willamette Valleys.

[9] Until the mid-19th century, the Silverton area was a broad, open grassland with small stands of Oregon white oak, ponderosa pine and Douglas fir.

Stands of Oregon white oak, red alder, big leaf maple, and black cottonwood lined streams and river banks.

Large stands of Douglas fir and western red cedar, mixed with Oregon white oak, remain in the Silverton area, especially on eastern ridge tops and on the slopes of the Waldo Hills to the south.

Due to decades of intensive timber extraction, mature second- and third-growth trees comprise existing evergreen stands.

[12] This region experiences warm (with occasional hot spells) and dry summers, but with no average monthly temperatures above 71.6 °F (22.0 °C).

Silverton's climate and its soil have made the area well suited for a variety of crops and for livestock grazing.

[21] In June 2008, Silverton came to international attention when an unarmed Irish citizen, Andrew James (AJ) Hanlon, aged 20, was killed by a police officer, Tony Gonzalez, in controversial circumstances.

[31] On 24 July 2008, a Marion County grand jury found that because Gonzalez had testified that he believed that Andrew James Hanlon was armed, his killing was justified.

[32] Eight days later, on August 1, 2008, and just over a month after Andrew was killed on the 30th of June, Gonzalez resigned from Silverton's police department.

[33] On December 7, 2008, Gonzalez was sentenced to 6 years and 3 months imprisonment when he pleaded guilty to sexually abusing a teenage girl.