The City of Alcoy/Alcoi is located in a depression (Hoya de Alcoy) and is surrounded by mountain ranges (Mariola, Carrascal de la Font Roja, els Plans and la Serreta), the peaks of which reach altitudes varying between 1,000 and 1,350 metres. The northern reaches of the municipality border with the province of Valencia.

A number of small rivers flow within its territory, (the rivers and streams known as Polop, Barxell and Molinar), creating a confluence beyond the city limits and forming the river Serpis, otherwise known as riu d'Alcoi, which meanders through hilly terrain all the way to its mouth, by Gandía, on the Mediterranean.

The climate is a typically Mediterranean one, with cold winters (7,5oC is the January average and frosts are frequent), and the usual precipitation in the form of snow; the average summer temperature is 23,5oC. Rainfall ranges widely from 350 to 850 mm annually.

The vegetation is composed of significant areas of the original autochthonous Mediterranean forest, namely the forest reserve known as the Carrascal de la Font Roja (a protected park); we can see fine specimens of ilex, yew and other deciduous species. Other areas have undergone extensive replanting and today we find that pines account for 85% of the forested areas. .

Communications have always been conditioned by the rather abrupt topography which gave rise to major public works. The N-340 highway (Barcelona-Cádiz) connects the city with Alicante to the south and with the Xàtiva-Valencia highway to the North with links to the N-III. The second order 3113 highway, Bañeres de Mariola-Callosa d'En Sarrià, connects it with Bocairent and Ontinyent to the east and with Benidorm and the motorway known as the autopista del Mediterráneo to the east. The road network is complemented by the Alcoy-Xàtiva-Valencia railroad.

Industry is the foremost and most characteristic economic activity of the city; the main sectors are mainly textile, metallurgy and food processing while the services sector is also significant. The main industrial areas or polígonos industriales are located in Cotes Baixes, la Beniata and Sant Benet.