Damme is set on the Zwin river between Zeebrugge and Brugge. When the Zwin silted up and blocked the port of Brugge in the 16th century, Damme became important as Brugge declined; however, the Zwin continued to fill in and Damme soon declined as Brugge had before it, shrinking to the size of a small village.

Damme has several good examples of Gothic architecture from its 15th century heyday: the Town Hall, The Church of Our Lady, and a number of private residences. Legend has it that Till Eulenspiegel hailed from Damme, and there is a museum dedicated to him.

Hoeke, Lapscheure, Moerkerke, Oostkerke, and Sijsele (Syssele) are boroughs within the municipal district of Damme.