The commune is rich in hydropower resources and contains large tracts of protected areas such as national parks and nature reserves.

According to the 2002 census of the National Statistics Institute, Panguipulli spans an area of 3,292.1 km2 (1,271 sq mi) and has 33,273 inhabitants (17,059 men and 16,214 women).

Some nearby tourist attractions include; the hot springs at Liquiñe, the Mocho-Choshuenco volcano, and the Huilo-Huilo Biological Reserve, which features year-round skiing.

As a commune, Panguipulli is a third-level administrative division of Chile administered by a municipal council, headed by an alcalde who is directly elected every four years.

The commune is represented in the Senate during the 2014–2022 period by Alfonso de Urresti (PS) and Ena von Baer (UDI) as part of the 16th senatorial constituency (Los Ríos Region).