The settlement is situated on the southern slopes of the Peralba mountain, part of the Carnic Alps range, close to the border with Austria. Sappada is located about 130 kilometres (81 mi) north of Venice and about 60 kilometres (37 mi) northeast of Belluno. As of 31 December 2004, the municipality had a population of 1,339 and an area of 62.6 square kilometres (24.2 sq mi).

Sappada is a German language island in Italy. The local vernacular, Plodarsich or plodar schproche (Sappadino in Italian), is a variety of Puster Valley Tyrolean Bavarian that is closely related to the speech of nearby Sauris (Zahre) in Friuli. It is however not closely related to the Germanic Cimbrian language spoken in other language islands in Trentino and Veneto. The German name of the settlement refers to the Piave (German: Ploden) river which runs through the valley.

Sappada borders the following municipalities: Forni Avoltri, Prato Carnico, Santo Stefano di Cadore, Vigo di Cadore.