Gracanica, in the district of Tuzla, was chosen to improve the living conditions of the many needy children in this particular area. The SOS Children's Village Gracanica was built about 3 kilometres from the city centre on a hill with a beautiful outlook over the town. Gracanica is a provincial town located in the north-east of Bosnia, approx. 200 kilometres away from Sarajevo. It is an old Bosnian town which used to be famous for its artisans and was considered as the regional cultural centre until the beginning of the 20th century because of its 10 mosques and its numerous schools and libraries. Today, Gracanica offers a friendly environment with a respectable economy to the inhabitants of the SOS Children's Village.

The SOS Children's Village Gracanica comprises twelve family houses, a community building, houses for SOS aunts (who support the SOS mothers and take care of the children when the mothers are on leave) and the village director as well as an administration and service area. It offers a new home to up to 78 children who lost their parents or cannot stay with them for different reasons. There is also an SOS Youth Facility in the city of Tuzla that can take in up to 34 youngsters.