The town marks the top of the Palmer Divide, a ridge running from Palmer Lake eastward which separates the Arkansas River drainage to the south from the Platte River drainage to the north. The highest point of the divide is about above sea level at Vollmer Hill located in the Black Forest. At Monument Hill the elevation is about . It staggers along the county line between Douglas County and El Paso County. This divide separates the Denver metropolitan area from the Pikes Peak area. The town's namesake, Palmer Lake, is situated at .
