Stepanakert is the de facto capital city of Artsakh.

Stepanakert is the largest city of the breakaway Republic of Artsakh, a de jure part of Azerbaijan, located within the disputed region of Nagorno-Karabakh. The city is located in a valley on the eastern slopes of the Karabakh mountain range, on the left bank of the Qarqarchay river.

The area that would become Stepanakert was originally an Armenian settlement named Vararakn. During the Soviet period, the city was made the capital of the Nagorno-Karabakh Autonomous Oblast, becoming a hub for economic and industrial activity. In addition, the city became a hotbed for political activity, serving as the center for Armenian demonstrations calling for the unification of Nagorno-Karabakh with Armenia. Stepanakert suffered extensive damage following the dissolution of the Soviet Union and the outbreak of the First Nagorno-Karabakh War and passed into the hands of local Armenians with the establishment of the Republic of Artsakh.