A former coal-mining town, it is subdivided into 8 subdistricts (khoroo) incorporating Shokhoi, Arjanchivlan, Terelj holiday center, and other residential areas, as well as a former Soviet military cantonment, including an airfield.

[3] Nalaikh is linked to Ulaanbaatar by a 43-kilometer narrow-gauge railway line, built in July 1938.

Nalaikh now has a broad-gauge branch line (via Khonkhor) to the Trans-Mongolian Railway.

The Kapitalnaya shaft went into operation in 1951, and at full capacity produced 600,000 metric tons of coal a year.

Nalaikh gained town status in 1962, and was established as a district of Ulaanbaatar in 1992.