Gonzaga is located at the northeastern tip of the province of Cagayan, bordered by the municipality of Santa Ana to the northeast, the municipality of Santa Teresita to the west, and the municipality of Lal-lo to the south. It is approximately 45 kilometres (28 mi) from Aparri, the nearest commercial center, 125 kilometres (78 mi) from the provincial capital of Tuguegarao City, and 607 kilometres (377 mi) from Manila.
Gonzaga has a total land area of 56,743 hectares (140,220 acres), the majority of which remains undeveloped. It has large stretches of virgin forests, especially throughout the mountainous areas of the Sierra Madre mountain range. The highest elevation in the municipality is 1,130 metres (3,710 ft) above sea level, located at Mount Cagua in Barangay Magrafil.
The majority of the municipality's 40 kilometres (25 mi) coastline is mostly along the Babuyan Channel to the north, although it is also bounded by the Pacific Ocean to the southeast. The eleven coastal barangays contain a total of 139 hectares (340 acres) of beaches, 69 hectares (170 acres) of mangrove forests, and 348 hectares (860 acres) of coral reefs.
The original inhabitants of Gonzaga were Negritos, especially members of Aeta tribes. The first recorded name of the area was Gampao, an Aeta word meaning 'mountainous,' later changed to Wangag, ('river'). In the eighteenth century, groups of Ilocano-speaking immigrants arrived in several waves by sea and land, gradually displacing the Aeta in the lowland areas.
Wangag was given ecclesiastical recognition on 23 February 1869, as a barrio of the Municipality of Buguey. In 1917 it was renamed Rumang-ay (Ilocano for 'to be progressive'). The following year, it was renamed after the first Filipino Governor of Cagayan, Gracio P. Gonzaga. The town was officially partitioned from Buguey on 1 January 1918 via Executive Order of Governor-GeneralFrancis Burton Harrison.
Gonzaga is primarily an agricultural municipality, with more than half of the workforce employed primarily as either farmers or fishers. Approximately 5,500 hectares (14,000 acres) of agricultural land are currently under production, the majority of which are dedicated to rice farming.