Bodega is located on Bodega Highway, about 5 mi (8 km) west of Freestone, California. Salmon Creek flows through the town.

There were formerly two Coast Miwok villages in the area: one (called Kennekono) sited near the current town and another (called Suwutenne) further north. In 1843, Captain Stephen Smith established the first West Coast lumber mill near Bodega. Saint Teresa of Avila Church was built in 1859 and dedicated in 1861.

Watson School, listed on the National Register of Historic Places and managed by the Sonoma County Regional Parks Department, is located just east of town.