The city is located in a valley on the eastern slopes of the Karabakh mountain range, on the left bank of the Qarqarçay (Karkar) river.

[6] During the Soviet period, the city was made the capital of the Nagorno-Karabakh Autonomous Oblast, becoming a hub for economic and industrial activity.

[1] In addition, the city became a hotbed for political activity, serving as the center for Armenian demonstrations calling for the unification of Nagorno-Karabakh with Armenia.

Stepanakert suffered extensive damage following the dissolution of the Soviet Union and the outbreak of the First Nagorno-Karabakh War and passed into the hands of local Armenians with the establishment of the Republic of Artsakh.

The economy was based on the service industry and had varied enterprises, food processing, wine making, and silk weaving being the most important.

[16] Most Azerbaijani sources claim that the settlement was built in late 18th century, as a place of rest for the heads of the Karabakh Khanate.

[17] The garrison consisted of barracks, hospitals, and a church, as well as several houses where officers' families and a small local population, who supplied the military units with food, lived.

[23] In February 1920, after a body thought to be of an Azerbaijani soldier was found, an anti-Armenian riot took place in the village that claimed several hundred lives.

[5] In 1923, Khankendi was renamed Stepanakert by the Soviet government in honor of Stepan Shahumian, a fallen Bolshevik party member and leader of the 26 Baku Commissars.

[1] At the time of the formation of the NKAO, Stepanakert was a dilapidated settlement, where the number of surviving buildings barely reached 10 to 15.

During the first years of the oblast, some of the buildings were restored and many were rebuilt, roads were improved, and electricity and telephone communications were installed in the city.

[29] Stepanakert served as Nagorno-Karabakh's main economic hub, and by the mid-1980s there were nineteen factories in operation in the city, including an electrical and asphalt plant.

[28] The political and economic reforms that General Secretary Mikhail Gorbachev undertook in 1985 saw a marked decentralization of Soviet authority.

A journalist for Time noted in an April 1992 article that "scarcely a single building [had] escaped damage in Stepanakert.

Residential areas were continuously hit by the Azerbaijani Army with cluster munitions throughout the war, starting on the first day of fighting, and residents were urged to use the city's bomb shelters.

[7] On 19–20 September 2023 Azerbaijan launched a new offensive in the region, which ended in a ceasefire and led to a mass exodus of ethnic Armenians a few days later.

By 29 September 2023, police of the Ministry of Internal Affairs of Artsakh left all their weapons in Stepanakert and completely abandoned the region.

[52] President Ilham Aliyev visited the city on 15 October and officially raised the flag of Azerbaijan at the building that was previously used as the Artsakh Presidential Palace.

[53] In December 2023, the first football match since the resumption of Azerbaijani control was played between MOIK Baku and Qarabağ FK from Aghdam in the Azerbaijan Cup.

[68] The Artsakh State Museum, based in Stepanakert, had an important collection of ancient artifacts and Christian manuscripts.

[5] Five higher educational institutions operated in the city: Many new schools in Stepanakert were opened from the late 1990s to 2010 with the help of the Armenian diaspora.

[78][79] The following month, on 21 October 2012, Artsakh played the return match at the Stepanakert Republican Stadium against Abkhazia, winning it with a result of 3–0.

The economy was based on the service industry and has varied enterprises, food processing, wine making, and silk weaving being the most important.

Prior to the First Nagorno-Karabakh War, the economy of Stepanakert was mainly based on food-processing industries, silk weaving and winemaking.

Artsakh Hek is the leading construction firm, while Base Metals was the leader in mining and production of building materials.

[citation needed] Stepanakert is located on the Karabakh plateau, at an average altitude of 813 m (2,667 ft) above sea level.

[101] During the period of the USSR, Stepanakert served as the capital of the Nagorno-Karabakh Autonomous Oblast within the Azerbaijani Soviet Socialist Republic, between 1923 and 1991.

With the self-declared independence of Artsakh in 1991, Stepanakert continued with its status as the political and cultural centre of the newly established republic, being home to all the national institutions: the Government House, the National Assembly, the Presidential Palace, the Constitutional Court, all ministries, judicial bodies and other government organizations.

[106] According to the 1910 publication of the Caucasian Calendar—a statistical almanac published by the office of the viceroy—there were 362 residents in the village of Khankendy of the Shusha uezd of the Elizavetpol Governorate in 1908, predominantly Russians.

[121] In May 2012, the director of the NKR's Civil Aviation Administration, Tigran Gabrielyan, announced that the airport would begin operations in summer 2012.