The surrounding area is part of the Hengill central volcano, and is geothermally active and experiences very frequent (usually minor) earthquakes. The town is known for its greenhouses, which are heated by hot water from volcanic hot springs. These springs are the site of occurrence of certain extremophile micro-organisms, that are capable of surviving in extremely hot environments.(C.Michael Hogan. 2010)

An infrequently erupting geyser, Grýla is at the entrance of the Ölfusdalur valley. The borehole Leppalúði on the way to the Gufudalur valley erupts continuously, reaching a height of 10-12 meters. Close to the church is a hot spring called Sandhólshver, formed during the violent South Iceland earthquake of 1896. A fenced-off geothermal area in the town has numerous hot springs and fumaroles.

To the south of Hveragerði, there is the small port of Þorlákshöfn, point of departure for the ferry to the Westman Islands.