Björnhyttan is located in a lowland with Björnhyttan River running though the village. The area has very old larch and silver spruce. The largest farm, Björnhyttans Mansion, is surrounded by a lot of deciduous trees such as maple and birch. The mansion is surrounded by meadows and traces of demolished cottages and a old starage buildning is found in the area. Large areas have paving stones. Surrounding farms are located on Saxberget and Gällsåsen which are included as part of the village.