It lies on the northern shore of the beautiful Carlingford Lough; behind it rise the Mourne Mountains, while across the lough are the Carlingford Hills, with Slieve Gullion.
The water supply, under the control of the City and District Water Commissioners (incorporated 1840), has its sources in the Mourne Mountains, Co.
The situation of the town is striking, the Newry Mountains and Slieve Gullion on the west, and the Mourne Mountains on the east, enclosing the narrow valley in which it lies.
During this time of comparative rest, rhyolites were extruded locally in county Antrim; and there is very strong evidence that the granite of the Mourne Mountains, and that which cuts the Carlingford gabbro, were added at the same time to the crust.
The basalt again broke out, through dikes that cut even the Mourne granite, and some of the best-known columnar masses of lava overlie the red deposits of iron-ore and mark this second basaltic epoch.
The mountains close down again, and the narrow inlet or fjord of Carlingford Lough separates the abrupt heights of the Carlingford and Mourne Mountains.