Paluzza borders the following municipalities: Arta Terme, Cercivento, Comeglians, Forni Avoltri, Kötschach-Mauthen (Austria), Lesachtal (Austria), Paularo, Ravascletto, Rigolato, Sutrio, Treppo Ligosullo. The municipal area comprises the frazioni of Casteons, Cleulis, Englaro, Naunina, Rivo, and Timau (German: Tischelwang), where a particular variant of the Southern Bavarian dialect is spoken.