The unincorporated area of Derwood lies east of Rockville, southeast of Gaithersburg, southwest of Olney and northwest of greater Silver Spring. The ZIP Code for all of Derwood is 20855. Many neighborhoods make up Derwood and it is served by quite a few Montgomery County Public Schools.
Derwood is located just north of the center of Montgomery County, between Gaithersburg and Rockville. Residents live close to the Shady Grove Metro Station, which is the northernmost station on the western side of Metrorail's Red Line.