Located in the north central part of the country, the city lies at an elevation of about 1310 m in a valley on the Tuul River. It is the cultural, industrial, and financial heart of the country. It is a transport center, connected by highway to all the major towns in Mongolia and by rail to the Trans-Siberian Railway and Chinese railroad network.
The city was founded in 1639 as a Buddhist monastery center and, in the 20th century, grew into a major manufacturing center defined by its broad boulevards and squares and Socialist Classicist-style buildings.