Aurora is located in Hamilton County just southeast of Grand Island between Henderson and Doniphan along Interstate 80 on the banks of the West Fork of the Blue River near Mormon Island Recreation Area.

The town of Aurora in Hamilton County, Nebraska was named after Aurora, Illinois by an early settler, David Stone, whose wife was a native of the Illinois town. The name was also appropriate because the Burlington and Aurora Railroad was expected to go through that area. Another local story or myth associated with the founding says that a particularly bright Aurora Borealis or Northern Light was seen when settlers first arrived.