Loei lies in the fertile valley of the Loei River, which runs from south to north through the eastern part of the town.
According to tradition, Loei was founded by people from Chiang Saen.
The Luang Prabang Range is practically devoid of vehicle roads on the Sainyabuli Province side, where there is only one north-south route extending from Sainyabuli, the provincial capital, to the Thai border opposite Thailand's Loei Province.