According to the United States Census Bureau, the city has a total area of 1.0 square miles (2.6 km²), all of it land.
Grace is one of the northernmost cities along the Wasatch Range which extends approximately south, and is only west of the large fault line that defines the range. Grace is located near the center of Gem Valley.
In stark contrast to the surrounding mountains, the valley floor in the immediate area of Grace is flat due to sedimentary deposit from the prehistoric Lake Bonneville which once covered the valley, of which the Great Salt Lake is a remnant. The Bear River runs to the north and west of Grace.
Grace's neighboring towns are Soda Springs to the north east, Bancroft to the north west, and Preston to the south. It is about from Lava Hot Springs, which is a local tourism and recreation destination. The nearest city with a major airport is Salt Lake City, Utah, which is approximately south.
The Bear River runs through Black Canyon which originates northwest of town and extends approximately south. Approximately one-half mile downstream from the point of origin, the Black Canyon forms a sharp gorge with steep walls of black basalt cliffs. At this point the gorge is only about wide and nearly deep.
The Wasatch Fault is visible from Grace due to the sharp displacement that creates a small bench at the foot of the mountains. Mild to moderate earthquakes have been reported to originate at the fault.
There were 364 households out of which 35.2% had children under the age of 18 living with them, 64.3% were married couples living together, 6.3% had a female householder with no husband present, and 24.5% were non-families. 23.4% of all households were made up of individuals and 14.8% had someone living alone who was 65 years of age or older. The average household size was 2.72 and the average family size was 3.21.
In the city the population was spread out with 31.4% under the age of 18, 6.9% from 18 to 24, 23.8% from 25 to 44, 22.5% from 45 to 64, and 15.4% who were 65 years of age or older. The median age was 36 years. For every 100 females there were 103.3 males. For every 100 females age 18 and over, there were 92.9 males.
The median income for a household in the city was $32,303, and the median income for a family was $39,306. Males had a median income of $33,214 versus $14,306 for females. The per capita income for the city was $13,452. About 5.7% of families and 7.0% of the population were below the poverty line, including 6.8% of those under age 18 and 11.7% of those age 65 or over.
There are 4 schools:Grace Elementary, Grace Junior High, Grace High, and Thatcher Elementary. There was a motion recently rejected for a bond approving the demolition of Grace Elementary and Thatcher Elementary and the building of a new school behind the Junior High.
In Grace, there are a couple of Pee-Wee and Little League, mainly American football and basketball. Neither of the elementaries support teams. The junior high supports track/athletics, American football, basketball (boys and girls), and volleyball. The high school also supports all these sports, along with golf, and formerly supported cross country. The basketball teams, both boys and girls, have been successful for the majority of their duration. The football program, while successful in the past, has not won a game for 2 years.