The municipality is located on the shores of Lake Atitlán, approximately 3 miles southeast of Panajachel, a popular tourist destination.

Subsistence agriculture and fishing are the means of survival for most families within the community, however, a recently spurred tourist industry has created a market for souvenir style goods and services.

Perhaps the most easily recognizable characteristic of Santa Catarina Palopó is the blue huipil, or blouse, which is worn prominently by the women of the community.

Since the huipil has been worn since the 16th century, it may seem to be a particularly indigenous trait, but the blue style is, however, the result of very recent external influences.

Furthermore, the village has various street shops selling traditional Kaqchikel clothes, which is one of the main sources of income for the locals.