Azerbaijan, also spelled Azerbaidzhan, officially Azerbaijani Republic, Azerbaijani Azärbayjan Respublikasi, country of eastern Transcaucasia. Occupying an area that fringes the southern flanks of the Caucasus Mountains, it is bounded on the north by Russia, on the east by the Caspian Sea, on the south by Iran, on the west by Armenia, and on the northwest by Georgia. The exclave of Naxçıvan (Nakhichevan) is located southwest of Azerbaijan proper, bounded by Armenia, Iran, and Turkey. Azerbaijan includes within its borders the predominantly Armenian enclave of Nagorno-Karabakh, which from 1988 was the focus of intense conflict between Azerbaijan and Armenia. The capital of Azerbaijan is the ancient city of Baku (Bakı), whose harbour is the best on the Caspian Sea.

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In addition to its variegated and often beautiful terrain, Azerbaijan offers a blend of traditions and modern development. The people of its remoter areas retain many distinctive folk traditions, but the lives of its inhabitants have been much influenced by accelerating modernization, characterized by industrialization, the development of power resources, and the growth of the cities, in which more than half the people now live. Industry dominates the economy, and more-diversified pursuits have supplemented the exploitation of oil, of which Azerbaijan was the world’s leading producer at the beginning of the 20th century. Fine horses and caviar continue as some of the more distinctive traditional exports of the republic.