Madison is located on the headwaters of Coal River, where Spruce and Pond forks come together to form the Little Coal River. State Routes 85 and 17 converge at Madison, which lies at an elevation of 716 feet just east of U.S. 119 (Appalachian Corridor G).

Madison is the county seat of Boone County. Originally called Boone Court House, the town was renamed about 1865, presumably for James Madison, the fourth president of the United States. Other theories hold that it was named for lawyer James Madison Laidley or for Madison Peyton, the coal operator for whom Peytona on Big Coal River was named. Madison was incorporated in 1906.

The first courthouse at Madison, a log structure, was burned by Union troops early in the Civil War. The second courthouse, made of local brick, served until 1913, and a frame building was used by county officials for the next several years. The present courthouse, occupied in 1921, is listed in the National Register of Historic Places.

Located on a principal route through the southern coalfields, Madison occupied a strategic place during the Mine Wars. Miners twice rallied at the town ballpark in August 1921 to consider whether to continue their march to neighboring Logan and Mingo counties. Thousands of armed marchers passed through the town and surrounding region on their way to and from the fighting at Blair Mountain, which is located up Spruce Fork from Madison.

The population of Madison in 2020 was 2,911, a slight decline from its peak of 3,228 in 1980. Residents work in retail business, for county government and the county schools, and in natural resources, including timber, coal, and related industries.