Montpelier is the capital of the U.S. state of Vermont and the county seat of Washington County. Known for its lively downtown driven by the activity of state government, Montpelier is the site of the Vermont State House, visible from the outskirts of town, which is located on State Street on the west side of downtown. The Winooski River, known locally as the "Onion River," flows along the south edge of downtown and is fed by several smaller tributaries that cut through residential districts.

Along with Barre, the city forms a small micropolitan area in the center of the state. As of the 2000 Census, it was the least-populous state capital, with a population of 8,035. It is famously the only state capital without a McDonald's franchise, and home to the last remaining clothespin manufacturer in the United States. The majority of businesses in the downtown area are locally owned; for example, the only national restaurant chains in downtown are Subway, Quiznos and the locally based Ben & Jerry's. Processing granite, mainly from the quarries in nearby Barre is a major part of the city's economic activity; timber was once a large industry in the region in the 19th century, but has largely declined. The city is also home to the New England Culinary Institute and the headquarters offices of several insurance companies.