The municipality is located on the banks of the riverTidan.
In the early 1970s a nationwide local government reform was carried out in Sweden. Urban and rural areas were merged into larger unitary municipalities. The former City of Tidaholm (instituted in 1910) was in 1974 amalgamated with the surrounding rural municipality Hökensås and parts of Dimbo and Fröjered. The number of original entities (as of 1863) within the present municipality is 20.