Inwood is physically bounded by the Harlem River to the north and east, and the Hudson River to the west. It extends southward to Fort Tryon Park and alternatively Dyckman Street or Fairview Avenue farther south, depending on the source.

While Inwood is the northernmost neighborhood on the island of Manhattan, it is not the northernmost neighborhood of the entire borough of Manhattan. That distinction is held by Marble Hill, a neighborhood situated just north of Inwood, on what is properly the North American mainland bordering the Bronx. Marble Hill was isolated from Inwood and the rest of Manhattan in 1895 when the route of the Harlem River was altered by the construction of the Harlem River Ship Canal.

The W.P.A. Guide to New York City, published in the 1930s, described Inwood with "rivers and hills insulate a suburban community that is as separate an entity as any in Manhattan."

Inwood marble, a soft, white, metamorphic rock found in northern Manhattan, takes its name after the neighborhood. From the mid-17th to the late 18th century, commercial quarries dotted the area as the material was used for building construction. However, due to its susceptibility to erosion, builders eventually used alternate construction materials. Inwood marble was quarried for government buildings in lower Manhattan and Washington, D.C. Small pieces of marble can still be seen in the stone retaining walls around Isham Park.