The Town of Montrose is primarily rural town in south central Dane County. However, its proximity to Madison has brought residential development pressures to the community during the 1970s. Although the Town of Montrose is a farming area, two rural settlements, Basco and Paoli, are located in the town along State Highway 69. Paoli, settled by the French and later the Irish, German and Swiss, is a residential area interspersed with small businesses and manufacturers.
Most of the town land is farmed with more than 19,200 acres assessed as agricultural in 1978. Forest and wetlands make up more of 1,500 acres of the town land use. The town is bordered on the east and west by ridgelineswhich form minor drainage divides for Sugar River, which drains the southwest part of the county. Meridian and Dickerson type soils make up some of the best farmland, which is located in the central valley of the town between the ridgeland.