Baku is the capital and largest city of Azerbaijan, as well as the largest city on the Caspian Sea and of the Caucasus region. Baku is located 28 metres (92 ft) below sea level, which makes it the lowest lying national capital in the world and also the largest city in the world located below sea level. Baku lies on the southern shore of the Absheron Peninsula, alongside the Bay of Baku. At the beginning of 2009, Baku's urban population was estimated at just over two million people. Officially, about 25% of all inhabitants of the country live in Baku's metropolitan area. Baku is the sole metropolis in Azerbaijan.

Baku is divided into twelve administrative raions and 48 townships. Among these are the townships on the islands of the Baku Archipelago, and the town of Oil Rocks built on stilts in the Caspian Sea, 60 kilometres (37 miles) away from Baku. The Inner City of Baku, along with the Shirvanshah's Palace and Maiden Tower, were inscribed as a UNESCO World Heritage Site in 2000. According to the Lonely Planet's ranking, Baku is also among the world's top ten destinations for urban nightlife.

The city is the scientific, cultural, and industrial centre of Azerbaijan. Many sizeable Azerbaijani institutions have their headquarters there. The Baku International Sea Trade Port is capable of handling two million tonnes of general and dry bulk cargoes per year. In recent years, Baku has become an important venue for international events. It hosted the 57th Eurovision Song Contest in 2012, the 2015 European Games, 4th Islamic Solidarity Games, the F1 Azerbaijan Grand Prix since 2016, hosted the final of the 2018-19 UEFA Europa League, and will be one of the host cities for UEFA Euro 2020.

The city is renowned for its harsh winds, which is reflected in its nickname, the "City of Winds".

Baku is one of the most important tourist destinations in the Caucasus, with hotels in the city earning 7 million euros in 2009. Many sizable world hotel chains have a presence in the city. Baku has many popular tourist and entertainment spots, such as the downtown Fountains Square, the One and Thousand Nights Beach, Shikhov Beach and Oil Rocks. Baku's vicinities feature Yanar Dag, an ever-blazing spot of natural gas. On 2 September 2010 with the inauguration of National Flag Square, Baku set the world record for tallest flagpole; on 24 May 2011, the city of Dushanbe in Tajikistan set a new record with a 3 metres (9.8 feet)-higher flagpole. A few years later, the Flag Pole was dismantled and the National Flag Square was closed off with fences.

Baku has several shopping malls; the most famous city centre malls are Port Baku, Park Bulvar, Ganjlik Mall, Metro Park, 28 MALL, Aygun city and AF MALL. The retail areas contain shops from chain stores up to high-end boutiques.

The city is listed 48th in the 2011 list of the most expensive cities in the world conducted by the Mercer Human Resource Consulting. Its Nizami Street and also the Neftchilar Avenue are among the most expensive streets in the world.