The municipal area stretches on the Gran Ega river in the southern, upper part of the Val Badia (Abteital). It is surrounded by the steep limestone peaks of the scenic Dolomites mountain range. Part of the comune lies in Alta Badia, a ski resort at the top end of the Val Badia valley.
Badia is accessible by road from La Val (Wengen) in the north, located about half-way down to the Puster Valley at Bruneck. In the south, the valley road leads up to three mountain passes: Valparola Pass, connecting Badia with Cortina d’Ampezzo, Campolongo Pass linking the neighbouring comune of Corvara with the Arabba ski resort, and Gardena Pass leading to Val Gardena (Gröden). All pass roads may be temporarily closed during harsh winter conditions.