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Iveland is located in the traditional district of Setesdal. The administrative centre of the municipality is the village of Birketveit. Other villages in the municipality include Bakken, Skaiå, and Vatnestrøm.

Iveland is the smallest municipality in Setesdal. The Otra river, which flows through Iveland, is the largest river in the Sørlandet district. Towards the east it borders on lake Oggevatn.

The municipality is bordered in the northwest by Evje og Hornnes, in the northeast and east by Birkenes, and in the south and west by Vennesla. The municipality has three population centers: Birketveit, Vatnestrøm, and Skaiå.

The Iveland area includes several hundred old mines. These pegmatite mines and quarries yield more than 100 different minerals, including minerals containing rare-earth elements, beryllium, scandium, uranium, and thorium.

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