The village lies on a rise above the upper reaches of the Wear valley. To the west of the village the land rises to Hamsterley Common at the eastern edge of the fell country which lies between the valleys of the Wear and the Tees. In the centre of the village is a pub called the Cross Keys.
Near to the village is Dryderdale Hall, a magnificent grade II listed mansion built in 1872 by the architect Alfred Waterhouse for the Backhouse family. It was used as a location for the filming of Get Carter.
Hamsterley has a population of around 550.
There is another, smaller village called Hamsterley in County Durham, 20 miles to the north, near Consett.