It is the only significant hilltop settlement in Dorset, being built about 215 metres (705 feet) above sea level on a greensand hill on the edge of Cranborne Chase.

Adjacent to the abbey site is Gold Hill, a steep cobbled street used in the 1970s as the setting for Ridley Scott's television advertisement for Hovis bread.

[8] Thomas Hardy used both "Shaston" and "Palladour" to refer to the town in the fictional Wessex of his novels such as Jude the Obscure.

[10] By the early eighth century there was an important minster church here,[11] and in 880 Alfred the Great founded a burgh (fortified settlement) here as a defence in the struggle with the Danish invaders.

[11] In 888 Alfred founded Shaftesbury Abbey, a Benedictine nunnery by the town's east gate, and appointed his daughter Ethelgifu as the first abbess.

[13] Æthelstan founded two royal mints,[14] which struck pennies bearing the town's name, and the abbey became the wealthiest Benedictine nunnery in England.

On 20 February 981 the relics of St Edward the Martyr, the teenage King of England, were transferred from Wareham and received at the abbey with great ceremony, thereafter turning Shaftesbury into a major site of pilgrimage for miracles of healing.

[16] In 1240 Cardinal Otto of Tonengo, legate to the Apostolic See of Pope Gregory IX visited the abbey and confirmed a charter of 1191, the first entered in the Glastonbury chartulary.

Also in this period a medieval farm owned by the Abbess of Shaftesbury was established, on a site now occupied by the Tesco supermarket car park.

In 1539, the last Abbess of Shaftesbury, Elizabeth Zouche, signed a deed of surrender, the (by then extremely wealthy) abbey was demolished, and its lands sold, leading to a temporary decline in the town.

[19] Buttonmaking also became important around this time, though with the later advent of industrialisation this subsequently declined, resulting in unemployment, starvation and emigration, with 350 families leaving for Canada.

[20] Malting and brewing were also significant in the 17th and 18th centuries, and like other Dorset towns such as Dorchester and Blandford Forum, Shaftesbury became known for its beer.

In the United Kingdom national parliament, Shaftesbury is in the North Dorset parliamentary constituency, represented since 2015 by Simon Hoare of the Conservative Party.

[27] In local government, Shaftesbury is administered by Dorset Council (a unitary authority) and Shaftesbury Town Council,[28] which has responsibilities that include open spaces and recreational facilities, allotments, litter, street markets, public conveniences, grants to voluntary organisations, cemetery provision, bus shelters, crime prevention initiatives, civic events and the town hall, planning (as a consultee) and the war memorial.

[32]The old centre of Shaftesbury is sited on a westward-pointing promontory of high ground in northeast Dorset, on the scarp edge of a range of hills that extend south and east into Cranborne Chase and neighbouring Wiltshire.

The countryside east of the town is part of the Cranborne Chase and West Wiltshire Downs Area of Outstanding Natural Beauty.

Below the Cann Sand, on the lower slopes of the hill to the north, west and south of the town, are extensive landslip deposits.

National retail chains with a presence in the town include the Body Shop, Boots, Somerfield, Superdrug, Tesco and WHSmith.

[42] Previous census figures for the total population of the civil parish are shown in the table below: Shaftesbury Arts Centre was established in 1957 and stages a variety of exhibitions, performances, workshops and training courses.

[20][45] Gold Hill Museum was founded in 1946 and displays many artefacts that relate to the history of Shaftesbury and the surrounding area, including Dorset's oldest fire engine, dating from 1744.

The fringe is always held on the first weekend in July and attracts an eccentric mix of performers from local singers to celebrity comics heading for Edinburgh.

The town is home to a volunteer-run community radio station, Alfred, broadcasting local news, speech programming and music on 107.3 FM and online.

In Jude the Obscure he described the loss of the town's former architectural glories, principally the abbey: "Vague imaginings of its castle, its three mints, its magnificent apsidal abbey, the chief glory of south Wessex, its twelve churches, its shrines, chantries, hospitals, its gabled freestone mansions—all now ruthlessly swept away—throw the visitor, even against his will, into a pensive melancholy, which the stimulating atmosphere and limitless landscape around him can scarcely dispel.

The challenging topography likely played a significant role in this,[citation needed] as constructing a railway up the steep slopes would have been difficult and costly.

Actor Robert Newton, best known for his portrayals of Long John Silver and Bill Sikes in the 1948 David Lean film Oliver Twist, was born there.

Actor Ernie Bourne, known for Blue Heelers, Prisoner: Cell Block H and Neighbours was born in 1926 in Shaftesbury.