National Route 7 links the city to the provincial capital San Luis, 90 km to the north-west.

The city was founded by Governor Justo Daract on or around December 1, 1856, as Fortín Constitucional, a mixed civilian-military fort, to protect the territory against attacks by the Ranquel aboriginal tribes.

Villa Mercedes has a dry winter humid subtropical climate (Köppen Cwa), typical from the geographic center of Argentina.

Summer is warm to hot with frequent thunderstorms, whereas winter is dry and prone to heavy frosts.

Snowfall is unusual but still more common than in Eastern Argentina, and occasionally it can stay on the ground for a couple of days, for example, during the July 2007 Argentine winter storm, when the temperature hit -16.8 °C,[1] the lowest on record for the city.