Sarajevo is near the geometric center of the triangular-shaped Bosnia-Herzegovina and within the historical region of Bosnia proper. It is situated 518 meters (1,699 ft) above sea level and lies in the Sarajevo valley, in the middle of the Dinaric Alps.[26] The valley itself once formed a vast expanse of greenery, but gave way to urban expansion and development in the post-World War II era. The city is surrounded by heavily forested hills and five major mountains. The highest of the surrounding peaks is Treskavica at 2,088 meters (6,850 ft), then Bjelašnica mountain at 2,067 meters (6,781 ft), Jahorina at 1,913 meters (6,276 ft), Trebević at 1,627 meters (5,338 ft), with 1,502 meters (4,928 ft) Igman being the shortest. The last four are also known as the Olympic Mountains of Sarajevo (see also 1984 Winter Olympics). The city itself has its fair share of hilly terrain, as evidenced by the many steeply inclined streets and residences seemingly perched on the hillsides.

The Miljacka river is one of the city's chief geographic features. It flows through the city from east through the center of Sarajevo to west part of city where eventually meets up with the Bosna river. Miljacka river is "The Sarajevo River", with its source (Vrelo Miljacke) 2 kilometres (1.2 miles) south of the town of Pale[27] at the foothills of Mount Jahorina, several kilometers to the east of Sarajevo center. The Bosna's source, Vrelo Bosne near Ilidža (west Sarajevo), is another notable natural landmark and a popular destination for Sarajevans and other tourists. Several smaller rivers and streams such as Koševski Potok also run through the city and its vicinity.