Powderhorn, Colorado, is located in the western part of the state, nestled in the Grand Mesa region. It experiences a typical high-altitude climate, characterized by cool summers and cold winters. Summers are pleasant with average temperatures ranging from the mid-60s to mid-70s Fahrenheit. Winters bring heavy snowfall, making it a haven for winter sports enthusiasts. Average temperatures during winter range from the teens to low 30s Fahrenheit.

Hydrologically, Powderhorn benefits from the melting snowpack, which feeds into the surrounding rivers and streams. These waters provide excellent opportunities for fishing, particularly for trout species. The nearby Gunnison River is renowned for its gold medal fishing.

Outdoor recreation opportunities in Powderhorn are abundant. The Powderhorn Mountain Resort offers skiing, snowboarding, and snowmobiling during the winter months. In the summer, visitors can enjoy mountain biking, hiking, and scenic chairlift rides. The Grand Mesa National Forest, encompassing Powderhorn, provides opportunities for camping, hunting, fishing, and nature exploration.

Powderhorn's climate, hydrology, and diverse outdoor recreational activities make it an attractive destination for both winter and summer enthusiasts.