Dillon is a home rule town situated in Summit County within the state of Colorado, United States. It lies at coordinates 39.6250, -106.0431, positioned near the confluence of the Snake River and Tenmile Creek in the Blue River Valley. The continental divide is located approximately ten miles to the east, defining the broader regional geography. As a municipal entity, it operates under home rule status, managing its own local affairs while remaining part of the Breckenridge Micropolitan Statistical Area.

The original settlement began as a stage stop and trading post named for prospector Tom Dillon. The town was officially incorporated on January 26, 1883, following the opening of its post office in October 1879. By 1892, the community had relocated twice to align with expanding railroad lines. All three historic sites are now collectively known as Old Dillon, marking the early development era before significant infrastructure changes altered the town's physical footprint.

In 1956, Denver Water initiated construction on a dam downstream, necessitating the relocation of residents and businesses. The current townsite was established about a mile north and 160 feet higher in elevation on a hillside. This new location sits on the shoreline of Dillon Reservoir, also known as Lake Dillon. The area is defined by its proximity to Dillon Dam and the surrounding water bodies, which dominate the local landscape and separate the modern town from its historic predecessors.

The community features notable landmarks such as the Dillon Amphitheater and serves as a hub for outdoor recreation due to its alpine setting. Visitors are drawn to the reservoir activities and the scenic mountain environment that characterizes the region. The presence of historic sites like Old Dillon provides a connection to the area's mining and transportation past, while the modern infrastructure supports tourism and local governance within the high-altitude Colorado environment.

The population was recorded at 1,064 in the 2020 United States census, reflecting a significant increase from previous decades. The town experiences an alpine subarctic climate with warm summer days and cold winters marked by heavy snowfall. With a total area of 1,487 acres, including over 531 acres of water, Dillon balances residential living with the demands of its natural surroundings, maintaining a distinct identity within Summit County.