Tysfjord was separated from Lødingen in 1869.
The municipality is named after Tysfjorden; the main village is Kjøpsvik. Tysfjorden is the second deepest fjord in Norway, with a maximum depth of 897 m. The municipality borders Ballangen in the north, Hamarøy in the south, Sweden in the east and Vestfjord in the northwest. The nature in the municipality is dominated by grey granite mountains, pine, birch and aspen woodland and forests, and the many fjord branches. Tysfjord's most dominant mountain, Stetind, is famous in Norway. This 1,392 m high natural granite obelisk, rising straight out of the fjord, is an awe-inspiring sight(, ). In Norwegian, it is called gudenes ambolt, e.g., anvil of the gods, partly because the summit forms a plateau. This was selected to be the national mountain of Norway in the autumn of 2002. The famous British climber William C. Slingsby described it as the ugliest mountain I ever saw; he did not reach the summit. The mountains near the border with Sweden have peaks up to 1,500 m above sea level. Mannfjordbotn Nature Reserve has undisturbed forests at the head of a narrow fjord branch surrounded by granite mountain walls (). From Hellemobotn, at the head of Hellemofjorden, the distance to the border with Sweden is only 6.3 km; this is also a scenic hiking terrain () with a canyon opening up in Hellemobotn (). Silver birch occurs in Tysfjord, as one of few areas in North Norway (Silver birch need more summer warmth than the more common Downy birch).
The large number of whales, orca in particular, that show up in the fjord every winter to feed on the herring, have attracted winter tourist from far away, but not in huge numbers. Harbor porpoise, sea eagles, great cormorants, otters and moose are all common in the Tysfjord area. A nearby lake is Båvrojávrre.
The climate is surprisingly temperate considering the location north of the Arctic circle. Mean annual temperature in Kjøpsvik is 4.2°C and mean annual precipitation is 1,080 mm. Summer is usually pleasant, although there might be persistent rain. Average monthly 24-hr temperature in June, July and August is 10.9°C, 13.3°C and 12.5°C, with average daily high about 16°C (61°F). Average temperatures are below freezing for slightly more than 4 months, statistically from November 17 to March 30, with January average of -2.7°C (27°F). October is the wettest month with on average 154 mm precipitation, May is the driest with 54 mm (). The midnight sun can be seen from the end of May to mid-July, and the sun is below the horizon from the beginning of December to mid-January. The aurora borealis is commonly seen in winter and late autumn.
Tysfjord is the only location in Norway where route E6 depends on a car ferry. There are ferry connections from Bognes to Skarberget (route E6) and from Bognes to Lødingen (connecting to route E10 and Lofoten, as well as the airport at Evenes). There is also a ferry connecting Drag south of the fjord with Kjøpsvik on the northern shore.
If Tysfjord experiences bad weather and the ferry connections are shut down, Norway is cut in two road-wise. A road connection is still maintained, albeit through Sweden, which makes it a very long drive.
Tysfjord is the only municipality in Norway where speakers of Lule Sami should theoretically be able to speak that language with officials, although this has not come to fruition. The Árran Lule Sami Center is located in the Tysfjord village of Drag.
Due to the limestone in Tysfjord, a cement factory was established with production starting in 1920 (). The modern Norcem factory still is a vital employer in Kjøpsvik, with about 130 employees; since 1999 part of the German world wide company Heidelberger Cement. Public service and some tourism and agriculture are the other main sources of income in Tysfjord.
The following list names the villages first in Sami and then in Norwegian: