It lies mostly in the Zittau Basin, but it also extends into the Jizera Mountains on the north and into the Ještěd–Kozákov Ridge on the south.

They came mainly from the town of Pirna in Saxony and began to mine metals in the vicinity of Chrastava, in particularly copper, tin, lead, iron and silver.

The town was almost entirely ethnic German, however, and was ceded to Nazi Germany and administered as part of the Reichsgau Sudetenland after the Munich Agreement in 1938.

[3] In 1943, during World War II, two forced labor camps were set up in the area by Organization Schmelt.

These camps provided workers for the Tannwald Textile Works and an ammunition factory (Deutsche Industriewerke AG) that produced hand grenades and other military material for the armed forces of Germany.

By then the subcamps included Polish, Czech, French, Belgian, Dutch and Danish women.

The largest employed with its headquarters in the town is a branch of the Benteler International company, focused on the production of automotive parts.

[7] The I/35 expressway (part of the European route E442) from Liberec to the Czech-German border passes through the town.