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Apart from Reutte in the northwest and Kitzbuhel in the east, the main towns spread along the Inn valley from Kufstein and Schwaz in the lower valley, through Innsbruck in the centre, to Imst and Landeck in the upper valley. By far the largest town is the state capital, Innsbruck.

Tyrol is a region of open countryside. Only 13% of the state has been developed for human habitation, with 35% forest, 30% pasture and 22% barren mountains. As a result the Tyrolean economy has been based on agriculture (mostly dairy farming), timber and mining (silver, lead, zinc, salt, limestone, silica sand and shale oil). Secondary industries have grown up using these raw materials, including wooden building materials, glass, cement and chemicals. Other light industry, originally based upon the ready availability of power from mountain streams but now using hydro-electric power, includes iron smelting, agricultural tools and machinery, railway carriages and electric power generators. In the 20th century, year round tourism (winter sports and summer touring) became a major part of the economy, while one of the largest employers in Innsbruck is the university.

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