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Waverly is located at 36°5′9″N 87°47′13″W / 36.08583°N 87.78694°W / 36.08583; -87.78694 (36.085847, −87.786917). The city is situated in the Trace Creek Valley, just over 10 miles (16 km) east of the creek's confluence with the Kentucky Lake impoundment of the Tennessee River . The low ridges that "wall in" Waverly to the north and south represent the fringe of the western section of the Highland Rim .