Olivenza is located on the left (east) bank of the Guadiana river, at an equal distance of south of Elvas in Portugal and Badajoz in Spain. The territory is triangular, with a smaller side resting on the Guadiana and the opposite vertex entering south-east and surrounded by Spanish territory. By an agreement between Spain and Portugal, the left bank of the river was recognized as being Portuguese territory (to a non-defined width, though), which sets the "de facto" border in that area. Besides the town, the municipality of Olivenza includes six villages: (), (), (), (), (), and (). Another village, , was detached to become the seat of a separate municipality in 1850.