Kentucky is noted for the distilling of Bourbon whiskey and for the breeding of thoroughbred racehorses. Tobacco, in which Kentucky is second only to North Carolina among U.S. producers, has long been the state's chief crop, and it is also its chief farm product, followed by horses and mules, cattle, and corn. Dairy goods, hay, and soybeans are also important.

Kentucky derives the greatest share of its income, however, from industry. Even Lexington, one of the world's largest loose-leaf tobacco markets, is industrialized. The state's chief manufactures include electrical equipment, food products, automobiles, nonelectrical machinery, chemicals, and apparel. Printing and publishing as well as tourism have become important industries. Kentucky is also one of the major U.S. producers of coal, the state's most valuable mineral; stone, petroleum, and natural gas are also extracted.

To the south and west lie the rolling plains and rocky hillsides of the Pennyroyal, a region that takes its name from a species of mint that grows abundantly in the area. There, underground streams have washed through limestone to form miles of subterranean passages, some of the notable ones being in Mammoth Cave National Park.

Northwest Kentucky is generally rough, rolling terrain, with scattered but important coal deposits. The isolated far-western region, bounded by the Mississippi, Ohio, and Tennessee rivers, is referred to as the Purchase, or Jackson Purchase (for Andrew Jackson, who was a prominent member of the commission that bought it from the Chickasaw in 1818). Consisting of floodplains and rolling uplands, it is among the largest migratory bird flyways in the United States.

Rivers are an important feature of Kentucky geography. The Ohio River forms the entire northern boundary of the state, flowing generally SW below Covington, until it joins the Mississippi River W of Paducah. At the southwest tip of the state about 5 sq mi (13 sq km) of Kentucky territory, created by a double hairpin turn in the Mississippi River, protrudes N from Tennessee into Missouri and is entirely separate from the rest of the state. In the east, the Big Sandy River and its tributary, the Tug Fork, form the boundary with West Virginia. Many rapid creeks in the Cumberland Mountains feed the Kentucky, the Cumberland, and the Licking rivers, which, together with the Tennessee and the Ohio, are the chief rivers of the state. The Kentucky Dam on the Tennessee River near Paducah, is a major part of the Tennessee Valley Authority system.

Kentucky's climate is generally mild, with few extremes of heat and cold. Frankfort is the capital, Louisville and Lexington the largest cities. Little remains of Kentucky's great forests that once spread over three quarters of the state and were renowned for their size and density. Tourist attractions include the famous Kentucky Derby at Churchill Downs in Louisville and the celebrated horse farms surrounding Lexington in the heart of the bluegrass region. The Abraham Lincoln Birthplace National Historic Site and Cumberland Gap National Historic Park are historic landmarks. At Fort Knox is the U.S. Depository.

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