According to the Instituto Nicaragüense de Estudios Territoriales (INETER), the municipality of Somotillo measures 724.71 km2 and lies approximately 41 meters above sea level.

Physiographically, most of the municipality lies north and east of the Nicaraguan Depression or Graben in the western foothills of the central cordillera of the country.

During Hurricane Mitch in 1998, these rivers overflowed their banks and threatened the town.

Common crops in the area are maize, cotton, sesame, and wheat, mainly grown by smallholders and tenant farmers.

A major highway passes through the town of Somotillo to the border crossing at Guasaule, creating customs and immigration jobs in Somotillo, as well as opportunities for smuggling.