Kelbra lies on the northern slopes of the Kyffhäuser mountains in the Goldene Aue. The B 85 federal road starts in the neighbouring village of Berga and runs through Kelbra over the Kyffhäuser to Passau.
Due to the proximity of the Kelbra Dam and the Kyffhäuser, the town is a type of tourist centre, but suffers from heavy day traffic, especially motorcycles, because the road climbing up to the Kyffhäuser starts here.