Until 2017, Teófilo Otoni used to be a statistical microregion including the following municipalities: Ataléia, Catuji, Franciscópolis, Frei Gaspar, Itaipé, Ladainha, Malacacheta, Novo Oriente de Minas, Ouro Verde de Minas, Pavão, Poté, Setubinha, and Teófilo Otoni.

Poor soils for agriculture and lack of industry have made Teófilo Otoni a major source of immigration to other regions of Brazil.

Prominent businesses in Teófilo Otoni include Pharmacy Indiana, Stationery Graffite, the store Magda Magazin, and Ramos Transport.

In October 1994, government of Brazil created an Export Processing Zone of 14.31 hectares in Teófilo Otoni, attracting several industries since then.

A Gem and Mineral Show (Feira Internacional de Pedras Preciosas (FIPP), is held here every year, attracting international buyers.

The fair provides the opportunity to buy both rough and cut stones directly from local producers, miners and cutters.