Hillwood City is the city where Arnold lives, and where most events of the show take place. According to an interview with Craig Bartlett it's an amalgam of large northwestern cities (mostly), including Seattle (his hometown), Portland (where he went to art school) and Brooklyn (the bridge, the brownstones, the subway).
The city's name is never explicitly said out loud by any character, but it's visible in several locales throughout the series.
- Elk Island, according to Gerald in "Wheezin' Ed", is located on the Skookumchuck River. The Skookumchuck River is located in Lewis and Thurston Counties in Washington State. Also in this episode, Shena's uncle Earl mentions Ivar's Restaurant, a local seafood chain established in 1938. They are scattered throughout Washington State.
- The episode "The Pig War" follows the events of the Pig War, which are the same to the events which took place on the boundary between what is now the State of Washington and British Columbia. The only different is the military numbers and actual battle.
- During the episode "Old Iron Man", Jimmy Kafka confirms that he and Grandpa Phil worked together during construction of the Grand Coulee Dam. The Grand Coulee Dam is located in Grant and Okanogan counties in Washington State. Construction began on July 16, 1933 and was opened on June 1, 1942.
- In "On the Lam", Harold, Stinky, and Sid jump into a boxcar that says "Wanatchee Northern", it is a misspelling of "Wenatchee", a city in central Washington State.
- In "The Beeper Queen", after Big Bob hurts his back, he recalls a meeting at the Big Bob's Beepers where an important figure is "flying in from Buffalo" to attend and to close a deal. In the United States, there is either a city, town or unincorporated area named "Buffalo" in 22 states including New York, suggesting the city of Hillwood is not set in one or more of these states. No location known as "Buffalo" exists in Washington State.
- At the end of "Road Trip", Helga and Miriam are seen entering Washington State before the credit roll. Originally headed for South Dakota on a trip, this confirms that Hillwood is located somewhere in the Evergreen State.
- In "Veterans Day", Martin mentions that "the capital is only a day's drive from here.", though Phil says it's 18 hours, when Washington, D.C. is actually a 40 hour drive from Washington State, and a 3-4 hour drive from New York.
- In several episodes that depict Phoebe's room, such as "Phoebe Skips", there is a poster that advertises "Tacoma Marine Park". Tacoma is a city in Washington State located on Puget Sound, southwest of Seattle and northeast of Washington's capital, Olympia. Additionally, Tacoma does have a Marine Park, although in real life, Marine Park is a recreational waterfront area rather than a marine wildlife park.
- The radio station MJZZ may have been inspired by the jazz radio station KMHD (89.1 FM), which can be heard in the Portland (Oregon) area.