Villamontes is the administrative center of Villamontes Municipality and is situated at 388 m above sea level, on the left bank of Río Pilcomayo where the river crosses the Sierra del Aguarague mountain range and flows southeast into the Chaco-Foreland.

Villamontes is located in the subhumid tropical zone, with a distinct dry season from June to September.

[2] During the Chaco War between Bolivia and Paraguay (1932–1935) Villamontes accommodated the headquarters of the Bolivian Army.

During the final stage of the war, the main lines of defense commanded by General Bernardino Bilbao Rioja were situated here.

Reason for the explosive increase has been the deployment of oil and gas fields in this region since the early 1990s.