Sanandaj occupies a fertile valley in the Zagros Mountains. The city is a major manufacturing and retail trade center with many diverse products, including carpets, cotton textiles, leather, metalware, cutlery, pottery, wood furniture and wood crafts, milled rice, refined sugar, and processed foods. Its old bazaar is noted as a place to buy Kurdish handicrafts.

Sanandaj is home to the ruins of an 11th- and 12th- century fortress, the Dar al-Ehsan Mosque, and the Sanandaj Museum. The museum is housed in a 19th-century royal palace whose Arusi Room, or Wedding Room is considered a masterpiece of handcrafted woodwork. Kurdistan University, founded after the 1979 Islamic revolution in Iran, is also in the city. The area around Sanandaj is known for its many mountain caves, hot springs, and freshwater lakes, many of which cater to tourists. The nature around Sanandaj is very beautiful.