Binnaway is a small town located on the Castlereagh River in central west New South Wales near the larger centre of Coonabarabran which is about 35 kilometres to the north. The road linking these two towns closely follows the meandering Castlereagh River. There are many pleasant areas to stop beside the road and on the river banks to have a picnic. Binnaway is also located near the similarly sized small town of Mendooran. Following local government amalgamation, the town is now located in the Warrumbungle Shire Council area which is headquartered at Coonabarabran.