The town of Farsund was established as a municipality on 1 January 1838 (see formannskapsdistrikt), although already recognized as a trading center in 1795. The rural municipalities of Herad, Lista, and Spind were merged with Farsund on 1 January 1965.
Farsund is a coastal municipality, bordering on Kvinesdal municipality in the north and Lyngdal in the north and east. In terms of square mileage it is one of the smallest municipalities in Vest-Agder county, yet one of the largest in number of inhabitants. The municipality of Farsund has 9,433 inhabitants (2012), concentrated in three centres of population: Farsund town (pop 3198), Vanse (pop 1901), and Vestbygda[disambiguation needed] (pop 1087). Loshavn with its wooden buildings is located outside Farsund.