The municipality is located in the region of the Alto Paranaíba, just north of the Nova Ponte Reservoir, which is fed by the Rio Anzol and the Ribeirão Santa Juliana.
Neighboring municipalities are: Monte Carmelo (N); Patrocínio (E); Pedrinópolis and Perdizes(S); Nova Ponte and Romaria (W).
A settlement was formed with the name Espírito Santo do Cemitério, later changed in 1909 to Iraí, a Tupi word meaning "river of honey".
[5] The most important economic activities are cattle raising for meat and dairy, commerce, and agriculture, with the main crops being coffee, corn, rice, and citrus fruits.
Iraí de Minas is in the middle tier of municipalities in the state with regard to economic and social development.
[6] The highest ranking municipality in Minas Gerais in 2000 was Poços de Caldas with 0.841, while the lowest was Setubinha with 0.568.