Oaxaca (wähäˈkä) [key], state (1990 pop. 3,019,560), 36,375 sq mi (94,211 sq km), S Mexico, on the Pacific Ocean and its arm, the Gulf of Tehuantepec. Oaxaca is the capital. The northern part of the state is dominated by the Sierra de Oaxaca; there are deep tortuous valleys in the south and broad, open semiarid valleys and plateaus in the north. Except on the west and the north, the periphery of the state is tropical, the interior generally temperate.
Fertile valleys make agriculture the principal economic activity. Sugarcane, coffee (of which Oaxaca is a leading national producer), tobacco, cereals, and tropical and semitropical fruits are grown; livestock is raised. Oaxaca's mineral deposits remain largely unexploited. The state's limited industrial activity centers around oil refining, beverage and paper manufacturing, and sugar and flour milling. Oaxaca is also known for its handicrafts, especially handwoven textiles, pottery, and leather goods. Despite the existence of several highways, inadequate communications remain the chief barrier to the state's industrialization.
There are famous archaeological sites at Mitla and Monte Albán. Indigenous peoples predominate here, as in few other states, with Mixtecs dominating in the highlands and Zapotecs elsewhere. Beach resorts are under development at Huatulco Bays and other locales along the southern coast, which should increase the already important contribution of tourism to the state's economy. Porfirio Díaz and Benito Juárez were born here.