Bryson City is located just west of the confluence of the Tuckasegee River, which flows westward from its source in the mountains to the east, and Deep Creek, which flows south from its source near Newfound Gap in the Great Smoky Mountains. After passing through Bryson City, the Tuckasegee flows southwestward for another 12 miles (19 km) before emptying into the Little Tennessee River. Fontana Lake, an impoundment of the Little Tennessee, covers the lower 11 miles (18 km) of the Tuckasegee.
The town is surrounded on all sides by high mountains. The Great Smoky Mountains rise to the north, the Cowee Mountains rise to the south, and the Plott Balsams rise to the east. The boundary of the Nantahala National Forest passes just south of the city and the boundary of the Great Smoky Mountains National Park passes just to the north. The Qualla Boundary, which comprises the bulk of the reservation of the Eastern Band of Cherokee Indians, dominates the area to the east.
Bryson City is traditionally centered around the junction of Everett Street and Main Street. Main Street is part of U.S. Route 19, which connects Bryson City to Cherokee to the northeast and Murphy to the southwest.
According to the United States Census Bureau, the town has a total area of 2.2 square miles (5.8 km²), of which, 2.1 square miles (5.5 km²) of it is land and 0.1 square miles (0.3 km²) of it (5.33%) is water.