Saltillo (sältēˈyō) [key], city (1990 pop. 420,947), capital of Coahuila state, N Mexico. It is located in an alluvial valley almost surrounded by mountains. Saltillo is a commercial and industrial center with heavy and light manufacturing; the automobile industry is notable. Founded in 1575, the city was known in colonial times for its annual fair, at which imports from Spain and the Philippines were exchanged for products made in Mexico. Saltillo was taken by Zachary Taylor's forces in the Mexican War and was occupied by French troops several times during the French intervention in Mexico. The city has a university and other institutions of higher learning.