At an altitude of 200 m, surrounded by forests and dominated by high sandstone cliffs, the hamlet lies in the valley of the Zinsel du Sud, a tributary of the Moder. Close to La Petite-Pierre, it is crossed by the GR 53 long-distance hiking trail, which links Wissembourg to Schirmeck.
Graufthal owes its fame and tourist development to two monuments: the ancient abbey and the semi-troglodytic houses.
A former village of lumberjacks, woodworkers and wheelwrights, it has undergone a number of recent changes, including the systematic removal of the Schopf.