The Highlands Plateau, is located in the southern Blue Ridge Mountains of Western North Carolina. The Village is placed at an average elevation of 4118' above MSL, making it one of the highest altitude as well as the coolest during the summer months of all towns in the southern United States. Highlands is one of the very rare locations at this latitude that has an average high of 78 in July. The annual rainfall approaches 90 inches. This rainfall and, counter intuitively, the abundant sunshine, create a lush and verdant microclimate which delights botanists.

Highlands owes its cooler weather to the fact that it straddles the Eastern Continental Divide, giving it a much higher elevation above mean sea level at just over 4,100 ft (1,200 m). The climate is what attracts the tourists. Highlands averages 87.57 inches of precipitation per year.