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Mancos is located at 37°20′44″N 108°17′33″W (37.345420, -108.292412).
According to the United States Census Bureau, the town has a total area of 0.6 square miles (1.6 km2), all land.
Mancos is located in the Mancos River valley at an elevation of approximately 7,000 feet (2,100 m). The Mancos River was named by Spanish explorers (Rio de los Mancos - "River of the Sleeve") perhaps for the way the river, which rises in the La Plata Mountains northeast of Mancos, drains the valley and then flows into the narrow confines of Weber Canyon and Mancos Canyon, southwest of Mesa Verde, where it joins the San Juan River. The town's skyline is dominated by the mass of Mesa Verde to the west, Menefee Mountain to the southeast, and the La Plata Mountains, a range to the east and northeast, in which the headwaters of the Mancos River originate.

Originally laid out as a railroad town, Mancos stretches for approximately a mile along the river and on both sides of it, while newer areas lie north of the old railroad alignment (now US 160, part of the San Juan Skyway and the Old Spanish Trail). The small main business district lies along Business Route 160, Grand Avenue, while newer business areas are located along the main highway. The highly publicized death of a schoolchild in 2003 led to a major reconstruction of US 160 through the town in following years, creating a street pattern which somewhat hampers development.
The Mancos River flows from east to west through the town, and then flows to the south into Mancos Canyon, on the west and south toe of Mesa Verde. Much of the townsite is located in a Special Flood Hazard Area (the 100-year floodplain)), including most bridges connecting the two parts of the town. (eheheh not like a bonus casino)
Northeast of Mancos is Mancos State Park located on Jackson Gulch Reservoir built by the Mancos Irrigation Project. Echo Basin, a winter (Nordic) skiing area and various vacation resorts and dude ranches, as well as an elk ranch and other tourist-, sports-, and hunting-related activities are located in and around the town.

As is common in Colorado, many government services are provided by special districts, both inside the corporate limits of the town of Mancos and outside in the county. Among these are the Mancos Library District, Mancos Water Conservancy District and Mancos Fire Protection District (which also provides emergency medical services). The nearest hospitals are Southwest Memorial Hospital in Cortez (approximately 22 mi or 35 km west) and Mercy Regional Hospital in Durango, approximately 45 mi or 72 km east. The town does have a medical clinic, funded through a variety of private and public sources.

The nearest general aviation and commercial airport is located southwest of Cortez, approximately 25 miles (40 km) west. There are a few private airstrips in the vicinity of Mancos, but these are not open to the public; a former town airfield near Jackson Gulch Reservoir is sometimes still marked on maps.