Laodicea is situated on a hill between fertile valleys irrigated by the waters of Asopus and Kapros streams. They are the tributaries of the Lycus River, now known as Çürüksu Çayı, which flows on the north-eastern side of the hill. This river gave Laodicea its cognomen – ad Lycum – meaning in the River Lycus. It distinguishes this city from other Laodiceas founded by Antiochus II.
Laodicea was founded on an important trade route, leading to this city from Sardis through Philadelphia. In its neighbourhood, there are many important ancient cities. Just 10 km to the north of Laodicea, there is the famous Roman spa of Hierapolis. Colossae, known from the Epistle to the Colossians written by St. Paul, is 14.5 km to the east. The city of Tripolis on the Meander is located on the road to Sardis, 26 km to the north-west of Laodicea.