Tea, grown on large plantations in the piedmont sections, is the principal crop. Rice, citrus fruit, sugarcane, sesame, cotton, and jute are also grown. Industry consists of the processing of agricultural products. Assam is an important oil-producing region with refineries at Digboi and Nunmati. A pipeline delivers oil to Barauni (Bihar state), and Kanpur (Uttar Pradesh). Locally, the Brahmaputra is important for river transportation. Railways supplement the waterway and are linked with other Indian lines by a route through West Bengal. Rail and road transportation are limited. Kolkata (Calcutta), in West Bengal state, is the nearest large Indian city. Assam has a highly heterogeneous population. Assamese, a dialect related to Bengali, is the predominant language.

The Ahom dynasty (from which the name Assam probably derives) established its rule c.1400 and held it intermittently for four centuries. Aurangzeb, the Mughal emperor, conquered Assam in 1661–62 but ruled only for a short time. The British assisted the Assamese several times in expelling Burmese invaders. By the Treaty of Yandabo (1826), ending an Anglo-Burmese war, Great Britain acquired Assam; it was administered as part of Bengal until 1919, when it became a governor's province. It was made a self-governing province in 1937. A southwest section (Sylhet) was incorporated in 1947 into East Pakistan. Assam's first university was opened in 1948.

There were serious riots in 1959–60 when Bengal-speaking Hindu refugees, fleeing from Muslim East Pakistan, settled in Assam. More refugees arrived from East Pakistan in 1971. Immigration of Bengali speakers sparked serious unrest in 1989. In 1960 and 1961 the Chinese invaded the North-East Frontier Agency (now the state of Arunachal Pradesh), which is N of Assam, but the Chinese withdrew in 1963. To improve its defenses, India embarked on a vast road-construction program.

Assam lost territory as non-Assamese populations were granted autonomy by the Indian government. In 1963 the Naga hills district was made into the state of Nagaland. The Naga independence movement has maintained its guerrilla struggle. In 1970, Meghalaya was created in the south. Mizoram and Arunachal Pradesh, separated in 1972, received statehood in 1987. Meanwhile, in 1979, a group of Assamese launched a guerrilla movement with the goal of independence for Assam. In 1995, India's improved relations with Myanmar led to joint military operations aimed at containing various rebel contingents, each separately seeking independence from India, but fighting has continued. The state has also experienced violence between ethnic groups.

Assam is normally governed by a chief minister, a cabinet responsible to a unicameral legislature, and by a governor appointed by the president of India. In 1990, however, Assam was put under direct central government rule.