The city is located at the centre of the department, on the intersection of Route 3 with Route 11, 90 kilometres (56 mi) from the centre ofMontevideo. The railroad track connecting Montevideo with Colonia and with the northwest of the country passes through the city. The river Río San José flows along the northeastern and eastern limits of the city.
San José de Mayo was founded on 1 July 1783. It had acquired "Villa" (town) status before the Independence of Uruguay, which was elevated to "Ciudad" (city) on 12 July 1856 by the Act of Ley Nº 495. During the 19th century it became a commercial and cultural centre, known as "Montevideo chico" ("little Montevideo"). The theatre "Teatro Macció" was constructed at the turn of the 20th century.
Besides being the administrative capital of the department, the city is an active regional commercial and financial centre. Its economy is linked mainly to cattle ranching, and it is an agro-industrial centre for dairy products, packing houses, mills, and chemicals.