Tawau is located on the south-eastern part of Sabah. To its east is the Sulu Sea and its west, the Crocker Range. Its geographical coordinates are 4.233o N, 117.833o E. Tawau faces the Cowie bay, and is neighboured to East Kalimantan of Indonesia. It is near to the Indonesian town of Tarakan and is also not far from the Sulu Islands in southern Philippines. Therefore, Tawau is an important gateway in the south-eastern part of the country.

The town is divided into three areas, namely Sabindo, Fajar and Old Tawau (Tawau Lama). The Federal Administrative Building is where most federal government department, such as the Immigration department, National Registration Department and Education Department house their office. It is located in the Sabindo area, along with the State Library.

Fajar, which is the commercial district of Tawau, is a third-tier development project. Major banks like HSBC, Maybank, Public Bank, RHB Bank, CIMB Bank and Bank Islam are all located here. The Tawau Courthouse and Tawau Municipal Council (MPT) are also located here.

Old Tawau is where the township was first located. It started developing from the port area, all the way to the hospital,  police headquarters to the central market.