The town is situated north of the Jizera Mountains on the left banks of the Kwisa River, the eastern edge of the historic Upper Lusatia region. It lies approximately 11 kilometres (7 mi) south of Lubań, and 125 kilometres (78 mi) west of the regional capital Wrocław. In the south, a border crossing leads to Jindřichovice pod Smrkem in Bohemia.
Lake Leśnia, a reservoir of the Kwisa River, is located east of the town.
History
Leśna Castle, erected on the border with the Polish Duchy of Silesia about 1.5 kilometres (0.9 miles) southeast of the town, was first mentioned in a 1247 deed. King Wenceslaus I of Bohemia, then ruler of the Upper Lusatian lands, ceded it to the Meissen bishop Conrad I of Wallhausen. The fortress probably lost its strategic importance with the construction of Czocha Castle further east in the early 14th century.
The Lissa settlement is documented in 1329. It may have been a founding of the Silesian Duke Henry I of Jawor, heir of the Upper Lusatian Kwisa District by his mother Beatrice of Brandenburg. Upon Henry's death in 1346, the Kwisa lands reverted to the Bohemian Crown, whereafter the lordship was enfeoffed to local noble dynasties. A first town layout was abandoned in 1434 upon devastations by the Hussite Wars, a flood and a fire, and rebuilt at its present location further south on the route from Frýdlant to Lubań. A centre of cloth manufacturing, it received market rights in 1515.