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Chalakudy is located at . It has an average elevation of 18 metres (59 feet). The town is situated on the banks of Chalakudy River which flows through the town. Chalakudy lies in a valley surrounded by hills and mountains with lush green forests. The river flows throughout the year except during dry season. The name 'Chalakudi' derived from two words chala meaning "river" and kudi meaning "town". Hence, it translates to "Town near a river". There are many theories regarding how Chalakuky came to be known as Chalkukye or Chalkokkiya but none can be said with certainty. One theory says that it was named after its founder king called Chembukkoya who ruled this region in ancient times.