Šmartno pri Litiji is situated in the western Posavje Hills, 252 m above sea level. A single glance at the map reveals this town is a crossroads; the roads lead in the directions Litija – Ljubljana or Litija – Zagorje, then into the Kostrevnica Valley, towards Moravče, past Bogenšperk and through Temenica to the road Ljubljana – Zagreb, and through the Zavrstnik Valley and Trebeljevo towards Ljubljana.

Šmartno pri Litiji is a clustered town situated 3 km southeast of Litija. The area has a very diverse geological composition; the oldest rocks date back to the Carboniferous and Permian periods (slate, quartz sandstone and conglomerate), Holocene alluvia have been found by the streams, dolomite and other rocks are present in this area, and in the direction of Zavrstnik numerous plant fossils have been discovered in the sandstone.

The Šmartno basin is surrounded by hills in a rectangular shape; it is bound to the northwest by the Sitarjevec Hill, to the east by the Ojstrman Hill, to the southeast by the Kuhelj Hill, the Veliki Oblak, Mali Oblak and Cvingar Hills, and to the west by the Tičnica and Strmenca Hills. Through the town runs the Reka Stream, which springs in Reka-Gozd and is fed by two tributaries, the Črni potok and Kostrevniški potok Streams. The Reka Stream issues into the Sava River at the village Breg. The old Šmartno town centre grew around the town square next to the parish church, while the new, residential part of the town extends to the north as far as Ustje and Jeze, as well as to the south. The village Ustje was joined to Šmartno in 1989. The town has also spread over two other villages, namely Roje and Slatna. Šmartno is an important crossroads where the roads meet that lead towards Litija, towards the Zasavje Region, through the Jablanica Valley to Moravče and the Mirna Valley, through Bogenšperk into the Temenica Valley and through Zavrstnik towards Ljubljana.