Folsom is situated in a wide valley near the headwaters of the Cimarron River, locally known as the Dry Cimarron as it runs underground during part of its course through eastern New Mexico.
Folsom se nalazi u širokoj dolini blizu ušća rijeke Cimarrona, lokalno znane kao Dry Cimarron jer teče pod zemljom na svom toku kroz Novi Meksiko.