Waterford is on the west bank of the Hudson River and north of Peebles Island State Park. The village was at the northern extreme of navigation on the Hudson River, and later became the eastern terminus of the Erie Canal and the southern terminus of the Champlain Canal. Although the north-south right-of-way of the Champlain Canal through Waterford has largely been abandoned and bypassed, the east-west Erie Canal continues to operate under the administration of the New York State Canal System (formerly called the New York State Barge Canal).