Kozani, the biggest city and capital of West Macedonia that was allegedly first inhabited in the prehistoric times, was made up of several kingdoms. It has been ruled by the Kingdom of Macedonia, then the Roman Empire, the Byzantine Empire, and by the Ottoman Empire. Kozani has been a prosperous area in the course of its history, with its merchants having dominated the commerce of the Balkan peninsula and reached countries like Germany, Switzerland and Austria.

It has a rich mining industry, producing lignite, nitrous salts and chromium.