The city lies on the Mureş River valley and it straddles the Sebeş river. It is at the crossroads of two main highways in Romania: E68 European route - DN1 coming from Sibiu and going towards Deva and E81 European route - DN7 coming from Sibiu and going towards Alba-Iulia and Cluj Napoca.
It is situated at 15 km south of the county capital Alba Iulia and it also has under its administration the following villages:
- Petreşti - 3.5 km south
- Lancrăm – 2 km north
- Răhău - 6 km east.
It is believed that there has been an earlier rural settlement in this area, with Romanian and Pecheneg population, situated east of today's city. But the city itself was built by German settlers - later referred as Transylvanian Saxons, but actually originating from the region of Rhine and Moselle - on the territory of the Hungarian Kingdom in the second half of the 12th century and became an important city in medieval Transylvania. Its city walls were reinforced after the Tatar (Mongol) invasions from 1241-1242, but the city was occupied in 1438 by the Ottoman Empire. Transylvania's voivode John I Zápolya died in Sebeş in 1540. The Transylvanian Diet met in Sebeş in 1546, 1556, 1598 and 1600. The location of the meetings, the Zápolya House, is now a museum.
After the union with Romania in 1918, the first mayor of the city was Lionel Blaga, the brother of the Romanian poet and philosopher Lucian Blaga, who was born in the nearby village of Lancrăm.
Today Sebeş is a city with a dynamic economy, having received in the last decade important foreign investments: wood processing and leather goods manufacturing are the chief domains of the local industry.