Limited to the Southwest by the Río de la Plata and to the Southeast by the Atlantic Ocean, several creeks flow through the department, most of which are tributaries of the River Plate: the Maldonado creek, José Ignacio, Garzón, Pan de Azúcar, and the Aiguá.

The strategic importance of that bay led to the decision by Montevideo's governor Joaquin de Viana to build a settlement in Portezuelo (near the Laguna del Diario) in 1755.

It is, along with Lavalleja, the main and most diversified mining area of the country producing (marble, metals, feldspars and construction materials), but it is currently underexploited.

It has however, been the department with the fourth most significant mining activity, after Lavalleja, Canelones and Montevideo, with a production worth 4,642,123 dollars, according to 1999 data.

Tourism, especially centered on Punta del Este, La Barra, Jose Ignacio and Piriápolis, has been one of the main sources of income for the department since the 1950s.