The town is located on the southern slopes of the Gurktal Alps (Nock Mountains), between the Lurnfeld Basin and the Lower Drau Valley.

However, Spittal and the surrounding lands were devastated by Turkish warriors in 1478 and shortly afterwards occupied by the Hungarian troops of Emperor Frederick's long-time rival King Matthias Corvinus.

Further ravaged by a peasant's revolt and two fires in 1522 and 1729, the decline continued, until in 1524 Archduke Ferdinand I of Austria entrusted his treasurer Gabriel von Salamanca (1489–1539) with the former Ortenburg county.

They also rebuilt the Spittl hospital on the other side of the Lieser River and the late Gothic Catholic parish church of Mary's Annunciation upon Romanesque foundations of the 13th century.

Today the palace hosts an annual festival for classic theatrical comedies (Komödienspiele Porcia) and is also home of a museum of local history.

East of the town, within the Drau Valley lies the village of Molzbichl, which is home to the remains of Carinthia's first monastery, established about 780 by Duke Tassilo III of Bavaria and abandoned in the 10th century.

On a slope above the valley, northeast of Molzbichl is Schloss Rothenthurn, in the 11th century called "Red Tower" (Roter Turm), a fiefdom of the Counts of Ortenburg.