The canton of Basel-Stadt was created when the historic canton of Basel was divided in 1833. The result of this division was two half cantons: Basel-Stadt and Basel-Land. The division itself was caused by the canton of Basel-Land, and the constitution of Basel-Stadt does not recognize the other half canton.

The canton of Basel-City is located in the north of Switzerland. It borders Germany and France to the north, and Basel-Landschaft to the south. Basel is located at the so called 'knee' of the River Rhine, at the point where from the west the little Birsig River joins the Rhine from the left, and where the Rhine itself switches from flowing in a westerly direction to a northerly flow.

The area of the canton is 37 km². This makes Basel-City the smallest canton in Switzerland.

The population of the canton is 185,227 (2007) of which 56,106 (or 30.29%) are foreigners.

The chemical industry and the pharmaceutical industry are of greatest significance in the canton. There are a number of multinationals in the city of Basel, attracting workers from both cantons of Basel and the areas across the border in France and Germany. Banking and finance are important as is the service sector in general. Small and middle-sized businesses employ a significant number of people, both in the city as the two municipalities.