Located in the mountains of Snowdonia, the town was once a centre of the Welsh slate mining industry. This industry declined during the early 20th century. The town's economy is now largely dependent on tourism. Although the town is in the centre of the Snowdonia National Park, the boundaries of the Park are specifically arranged to omit the town with its substantial slate waste heaps from the Park.
The hills around Blaenau Ffestiniog form the watershed between the River Lledr flowing to the north (a tributary of the River Conwy) and the River Dwyryd flowing to the west.
