Farmington is located at the junction of the San Juan River, the Animas River, and the La Plata River, and is located on the Colorado Plateau. Farmington is the largest city of San Juan County, one of the geographically largest counties in the United States covering 5,538 square miles (14,340 km2). The county seat and the other city in San Juan County is Aztec. Farmington serves as the commercial hub for most of northwestern New Mexico and the Four Corners region of four states. Farmington lies at or near the junction of three important highways: U.S. Highway 550, U.S. Highway 64, and New Mexico Highway 371.

It is on the Trails of the Ancients Byway, one of the designated New Mexico Scenic Byways.

The primary industries of San Juan County are the production of petroleum, natural gas, and coal. Major coal mines are the Navajo and San Juan mines, operated by BHP Billiton 15 to 19 miles southwest of Farmington. The coal mined from the Navajo and San Juan mines is used entirely for fuel for the nearby Four Corners Generating Station and San Juan Generating Station to produce electric power.