[4] Sweetwater is the home of the Craighead Caverns which contains the Lost Sea, the United States' largest underground lake.

[6] A legend states that the town's name originated from settlers’ descriptions of area springs.

[1] The city lies along Sweetwater Creek, which flows northeast for several miles before emptying into the Watts Bar Lake impoundment of the Tennessee River.

The creek's drainage has created a lowland area known as Sweetwater Valley, which is surrounded by low hills.

According to the United States Census Bureau, the city has a total area of 6.9 square miles (18 km2), all land.

Sweetwater is located in a valley amidst the foothills of the Great Smoky Mountains, and is surrounded by farmland.

In addition, some light industry is located in Sweetwater, including a chemical factory, a hosiery mill, and a stove plant.

On January 15, 2022, Red Stag Fulfillment announced plans to develop a 420-acre ecommerce distribution center along I-75, estimated to provide 3,500 jobs and annual tax revenue of $1.9 million to the city of Sweetwater.