Arauca is located in the extreme north of the Orinoco part of Colombia (the Llanos Oriental), bordering Venezuela. It is bordered to the south by the Casanare River and the Meta River, which separate it from the departments of Casanare and Vichada. To the west borders with the Boyacá Department. The Caño Limón oil fields located in its territory accounts for 30% of Colombian oil output. Its capital is the town of Arauca.
The department's indigenous population is at least 3,591 people. Six indigenous peoples are among them with the following populations: U'wa, 1.124 members; Betoye, 800; Guahibo/Sikuani, 782; Hitnü, 441; Cuiva/Kuiba, 241; Chiricoa, 173 and Piapoco, 30. Twenty six reserves (resguardos) cover an area of 1,281.67 km².
Arauca is also a municipality and capital city of the Arauca Department. Its full name is Villa de Santa Bárbara de Arauca. Since its founding, Arauca’s primary business has been the raising of cattle, and this is still the case, but increasingly, since 1984, exploitation of nearby petroleum (oil sands) has provided the bulk of 
municipal income in recent years.
The building of the bridge, Puente José Antonio Páez, connecting it with Venezuela stimulated the economy, as did completion of the highway to Bogotá, known as The Route of the Liberators (La Ruta de los Libertadores). Arauca is now on the main surface route between Caracas and Bogotá.
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