As the capital of Vermont, Montpelier is the site of the Vermont State House, seat of the legislative branch of Vermont government. By population, it is the smallest state capital in the United States. Today, government, higher education, insurance and tourism are Montpeliers principal businesses. Montpelier is situated among foothills just to the east of the Green Mountains and is surrounded by hills and granite ledges. The Winooski River flows west along the south edge of downtown village 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; together they are known as the twin cities.
Located in the geographic center of the state, Montpelier is one of Vermont's most readily accessible cities and towns. The city is located along Interstate 89, while east-west U.S. Route 2 and north-south Vermont Route 12 are two other principal routes that intersect in Montpelier. Both I-89 and U.S. 2 provide a direct link to Burlington and the populous Lake Champlain Valley in the northwestern corner of the state.
Located in Montpelier are the New England Culinary Institute, the annual Green Mountain Film Festival and the headquarters of several insurance companies.