Taupo is located at the outlet of Lake Taupo, New Zealand's largest lake, in the northeast part of the lake where it discharges to theWaikato River. The river flows over one of New Zealand's most spectacular waterfalls, Huka Falls, a short distance north of the town. Taupo is a centre of volcanic and geothermal activity and hot springs suitable for bathing are located at several places in the vicinity. The volcanic mountain of Mount Tauhara lies six kilometres (4 mi) to the east. Some forested area exists near Taupo, withun derstory vegetation consisting of certain shrubs and ferns.
Somewhat to the northeast are significant hot springs. These springs are the site of occurrence of certain extremophile micro-organisms, that are capable of surviving in extremely hot environments.
Taupo is situated on a stretch of State Highway 1, running concurrently with State Highway 5. It is situated 53 km North of Turangi. It is one of the few centres in New Zealand that were never linked to the rail network.
The small but growing satellite town of Kinloch, where a Jack Nicklaus golf resort is being constructed, is 20 kilometres west along the lake
