Olallie Butte is located within Jefferson, Marion, and Wasco counties, all within the northwestern to north-central part of the U.S. state of Oregon. The volcano lies just outside the irregularly shaped Olallie Roadless Area, which lies within the Mount Hood National Forest to the west of the major crest of the Cascade Range and directly north of the Mount Jefferson Wilderness. This region encompasses of an upland area with small volcanoes, bordered to the southwest by the canyon wall of the North Fork of the Breitenbush River. It can be accessed from trails running from the Clackamas and Breitenbush River drainages, which reach the eastern and southern parts of the Olallie Area, as well as logging roads that enter the Olallie roadless area at its northern portion.