The town is located on the island of Vardøya in the Barents Sea, just off the coast of the large Varanger Peninsula.

[2] Vardø is the easternmost town in Norway (and in all the Nordic countries), located at 31°E, which is east of Saint Petersburg, Kyiv, and Istanbul.

The village grew up around the fortress and became a major trading post between the Norwegians in Finnmark county and the nearby Russians.

This arrangement did not entirely satisfy the new formannskapsdistrikt law, so in 1839, the town was separated from the rural district to form its own town-municipality.

Since the Vardø landdistrikt outside the town had too few residents (according to the law), one municipal government was shared between the two until 22 May 1868 when a royal resolution was passed making them completely separate and self-governing.

[5][8] The port of Vardø, on the Barents Sea, remains ice-free all year round thanks to the warm North Atlantic drift.

The "midnight sun" is above the horizon from 16 May to 29 July, and the period with continuous daylight lasts a bit longer, polar night from 24 November to 19 January.