Helmsdale sits on the fertile soils of the eastern coast of Sutherland, at the point where the River Helmsdale enters the north sea. Although a fine natural harbour existed, it was developed in 1818 by the Sutherland Estate as a fishing village to provide employment for the displaced and reluctant crofters of the glens. As with other villages in the Highlands, as herring fishing declined so there was an increase in tourism. Today it is fly fishing that attracts people, the River Helmsdale is regarded as one of Europe's finest fly fishing rivers, and Atlantic salmon are the main species on the river. Employment still exists in a nearby fish processing plant and a lobster factory.
The A9 once crossed a Thomas Telford bridge, built in 1811 and at the landward side of the town but after road improvements and the building of a new road bridge on the site of the ruined remains of Helmsdale Castle, the A9 now crosses the River Helmsdale at the seaward end of the town. The A9 follows the route of one of the parliamentary roads, established as a response to the depopulation of the Highlands and as a means to improve the local economy.
Visitor attractions in the local area include the Ousdale Weaving Centre 3 miles (5 km) north on the road to Wick, The Timespan Heritage Centre which offers an audio/visual programme telling the story of Highland life past and present, and the Ord of Caithness which provides spectacular views of the Caithness coastline.