Gracias is a small Honduran town/municipality that was founded in 1536. It is found in the mountainous centre of western Honduras, in the Lempira departamento.
Elevation ranges from roughly 800 meters at the town square to 2,849 meters at the peak of Montaña Celaque (Celaque Mountain). Climate is greatly influenced by elevation, with the low-lying portions having a wet-dry (monsoonal) pattern. Montaña Celaque is the highest mountain and largest cloud forest in Honduras, and is protected through Celaque Mountain National Park.
The development of a tourist economy is seen as a driver of economic development. This tourism is based on the town's historic and natural attractions including colonial churches, Celaque Mountain and hot springs (aguas termales).