The city of Thessaloniki is at its northeastern tip, and it is bounded by Pieria Imathia and Larissa on the west and the Chalkidiki peninsula on the east, with Cape Kassandra at the southeasternmost corner.

By narrower definitions, the Thermaic Gulf is bounded on the west by the line from the mouth of the Axios or Vardar to Cape Megalo Embolo, making it about 15 km (9.3 mi) long; while the smaller Gulf of Salonica is bounded by a line running from the mouth of the Gallikos to Mikro Emvolo.

Places that lie on the gulf include Sani, Kassandreia, ancient Potidaea, Nea Moudania, Agia Triada, Neoi Epivates, Peraia, Kalochori, Methoni, Pydna, Paralia Katerinis, Olympiaki Akti, Alexandrini, Koutsoupia and Stomio (Larissa).

The Thermaic Gulf was significantly larger in classical times, with many ancient seaside cities (e.g. Pella) are now found several kilometers inland.

The extensive silting mainly affects the northern and western parts of the gulf, which receive the bulk of alluvial outflow.