The village lies immediately north of the Manistee County line, and is divided between Colfax and Weldon townships.

Crystal Mountain, one of Michigan's largest ski resorts, is located just west of Thompsonville.

According to the United States Census Bureau, the village has a total area of 1.00 square mile (2.59 km2), all land.

[4] Thompsonville was established when construction of the lines of two railroads, the Chicago & West Michigan and the Frankfort & South Eastern, crossed here in 1889.

The village, originally called Lyndonville, was platted on July 23, 1890, and was named for Sumner S. Thompson,(4/12/1823-10/24/1889), who was the President of the Frankfort and South Eastern Railroad at the time of his death.

Of the two railroads serving the village, the Chicago & West Michigan was merged into the Pere Marquette Railway in 1900 and the Chesapeake & Ohio Railway in 1947, while the Frankfort & South Eastern was acquired in 1892 by the Toledo, Ann Arbor & North Michigan, which in turn was reorganized in 1895 as the Ann Arbor Railroad.

30.6% of all households were made up of individuals, and 12.6% had someone living alone who was 65 years of age or older.