The Eden Valley is situated in the Barossa Range to the east, overlooking the Barossa Valley. Together, these valleys comprise what is today known as the Barossa zone. Englishman Joseph Gilbert planted the first Eden Valley vineyard, Pewsey Vale, in 1847.

The Barossa Range lies in the South Mount Lofty Ranges, a north-south range. Eden Valley lies within the Barossa Range and consists of river valleys and undulating hills covered with large gums, rocky outcrops and Aboriginal sites. It is a high-altitude area of between 400 and 500 metres, compared with the Barossa Valley's elevation of 200 to 300 metres. This higher altitude, with its one to two weeks' later ripening pattern, results in more distinctive varietal flavour characteristics and higher acidities, due to the increased continentality.

Altitude is important in determining mesoclimate, or site climate, although aspect and slope are also important in this varied, hilly terrain. Thus Pewsey Vale at the southern end of the valley, at 500 metres, is appreciably wetter and cooler than the Henschke vineyards around Keyneton at an elevation of 400 metres. Overall the growing season temperatures are significantly lower than those of the Barossa Valley, with the final stages of ripening taking place in much cooler conditions. The higher vineyard sites are generally better suited to whites than red varieties.

Annual rainfall is about 700 millimetres with 178 millimetres falling between October and March. The frost risk is slight, and the mean January temperature is 22.2ºC.

Soils are many and varied, ranging from sandy loam to clay loam over clay-weathered rock subsoils, which cover a schist/silt sandstone bedrock often containing ironstone gravels, quartz gravels and rock fragments. The soil is well suited to dryland viticulture. In the valleys the soil is deep, on the hilltops it is shallow and rocky.