Prijedor is located in north-western Bosnia and Herzegovina, Bosanska Krajina. It is located between towns of Sanski Most to the south, the Novi Grad (to the west) and Bosanska Dubica (to the north), and the regional capital of Banja Luka to the east. Except for the area of Sanski Most, the other neighbouring districts had Serbian majority populations prior to the Bosnian war.
Two smaller towns Ljubija and Kozarac still belong to the municipality of Prijedor, as well as numerous villages and hamlets. The Sana river flows through the municipality (which has a shape that resembles an irregular vertical rectangle) from the west towards the centre, and then bending to the south. The town of Prijedor is located in the valley of the river, where the Sana river bends to the south. There is a large artificial lake for fishfarming to the south-east of Prijedor town. The district is mountainous especially in the northern and western areas, with forested Kozara mountain in the north and parts of the Majdanska mountain in the south-west.
Chapi