Kalyan city is located on the lower course of the Ulhas River with access to the Arabian Sea, via its two estuaries or creeks, the Thane Creek and the Vasai Creek. Kalyan is 48 km (30 mi) north-east of Mumbai. Overcrowding in Mumbai and incentives from the government to develop areas outside of Mumbai have attracted industrial business as well as industrial employees to Kalyan.

Kalyan was also considered at one time as one of the best places to live in the neighborhood of Mumbai, as it is far away from the pollution of the main city.

Kalyan Junction is a very important railway station for suburban travel as well as for long distance trains. The suburban or metropolitan railway passenger transport line coming in from Mumbai splits into two at Kalyan Junction, one heads south-east for Karjat and Khopoli towards Lonavla, Mahabaleshwar and Pune, the other heads north-east for Kasara towards Nashik.

On the eastern side of the city is a large industrial complex where electrical equipment, rayon, and dyes and other chemicals are manufactured. There are also a large number of textile-based cottage industries.