The city is bordered by the Rural Municipality of Hanover (north, west, and south), and the Rural Municipality of La Broquerie (east). The name of "Steinbach" is translated from German as "Stony Brook" and was first settled by Mennonites in 1874. They were ethnic Germans from Ukraine. The city continues to have a strong Mennonite and German influence today; more than 50 percent of the residents claim German heritage. Steinbach is found on the eastern edge of the Canadian Prairies, while Sandilands Provincial Forest is a short distance east of the city.