Rajapalayam is located on the Madurai to Quilon National Highway at a distance of 562 km south of the state capital Chennai.

Today, Rajapalayam is a major hub of the textile industry, famous for bandages, woven fabric, nightwear, and other products.

is a large player in producing surgical cotton gauze, and nearby Dhalavaipuram and Muhavoor manufacture women's nightwear.

State highway SH-41 (Rajapalayam-Sankarankovil-Tirunelveli) links the major parts of the extreme south of Tamil Nadu, including Tirunelveli, Tuticorin and Kanyakumari.

The road also offers good freight connectivity to Tamil Nadu's second largest seaport, Tuticorin.

Several private and government operated services connect to Chennai, Bengaluru, Coimbatore, Hosur, Pondicherry, Salem, Tirupati, Tiruppur, Trichy, Vellore and other major cities.

Rajapalayam old bus station is the boarding point for buses connecting nearby villages.