Wookey Hole sits in the civil parish of St Cuthbert Out, one mile north-west of the cathedral city of Wells. The village lies on the boundary of the Mendip Hills Area of Outstanding Natural Beauty - meaning the country immediately north and west is protected farmland and woodland, and the village itself is the last cluster of buildings before the slope rises into the limestone hills. The name comes from either Old English wocig (a noose or animal trap) or, more likely, the Celtic word ogo or ogof, meaning cave. The earlier name for the caves was Ochie or Ochy. By the 18th century locals called them Okey Hole, and the village took its modern name from the caves rather than the other way around.

The dominant building in the village, after the cave entrance itself, is the former paper mill. The current building dates from around 1860 and is Grade II listed; its water wheel runs on a small canal channelled from the river that emerges from the cave. The lead-contaminated water from Roman-era Mendip mining was always a problem for paper quality - lead from old workings still leaches into the catchment area - but Wookey Hole produced handmade paper commercially for over a century. The end came in February 2008, when owner Gerry Cottle, the former circus proprietor who bought the site, concluded there was no longer a market for handmade paper and sold most of the historic machinery. Visitors can still watch a short video showing how the cotton-rag paper was made. The mill building stands. The wheel turns. The trade is gone.

Down the lane, half-hidden by trees, stands Glencot House - a Grade II listed country house from 1887, designed by Ernest George and Harold Peto for W.S. Hodgkinson, whose family owned the caves for over 500 years. George and Peto were among the most fashionable architects of late Victorian England; their firm designed houses, hotels, and country retreats for the moneyed class. Their drawing of Glencot was exhibited at the Royal Academy and now sits in the archives of the Royal Institute of British Architects. The building shows up in The Building News for 13 May 1887. Hodgkinson family ownership of the caves continued for generations - Olive Hodgkinson, a cave guide whose husband's family had owned the site for centuries, was a contestant on the BBC quiz show What's My Line? in 1956 - until Madame Tussauds bought the operation in 1973.

Bubwith farmhouse on the village's main lane is an 18th-century Grade II listed building. The post office on the High Street is also listed. The Grade II Church of St Mary Magdalene dates from 1873-74, late Victorian and unremarkable architecturally but the village's parish church nonetheless. In February 2009 Gerry Cottle did something that upset many of the villagers: he turned the Victorian bowling green next to the caves into a crazy golf course, without first obtaining planning permission. The bowling green had been part of village social life for over a century. The crazy golf is part of the tourist site. Whether visitors come to Wookey Hole for the caves and stay because there is mini-golf, or visit because there is mini-golf and discover the caves, the marketing model has worked: the tourist site remains the village's largest employer.

The Monarch's Way - a 615-mile long-distance footpath that traces the escape route of King Charles II after the Battle of Worcester in 1651 - passes through Wookey Hole on its way south. So does the Mendip Way, a 50-mile path running east to west across the Mendip Hills. National Cycle Route 3 goes through as well. Just outside the village is the entrance to Ebbor Gorge National Nature Reserve - a wooded, steep-sided limestone ravine that connects to the Wookey Hole cave system at the geological level even though there is no walkable connection between them. Hike up Ebbor Gorge from the village and you climb into the broader limestone plateau of the Mendips, where on a clear day you can see Cheddar Gorge cut into the same hills five miles to the west.