Tasmania is geologically similar to the Australian continent and was once connected to it. The climate is equable and the rainfall moderate. The island is mountainous with considerable forestation; Legge Tor (5,160 ft/1,573 m) is the highest peak. Great Lake in the interior is the largest lake and the reservoir of an important hydroelectric plant. Tasmania has the highest proportion of national park land of all Australian states; a little less than half the island is protected.

Sawmilling and woodchipping industries are important. Agriculture is confined almost exclusively to small farms; among the crops grown are opium poppies for medicinal drugs. The raising of sheep for wool in the east and dairy farming in the northwest are also important. The mining of copper, zinc, tin, lead, and iron has increased in recent years. The state's major manufactures are metals and metal products. Tourism also is growing in significance, due in part to better ferry connections to the continent.

The island was explored in 1642 by the Dutch navigator Abel Tasman, who named it Van Diemen's Land. Capt. James Cook visited the island in 1777 and, in 1803, Great Britain took possession and established a penal colony. The indigenous population, which had been on the island some 35,000 years, numbered about 5,000 at the time of colonization; they were subsequently decimated, with only a few mixed-race survivors. Governed by New South Wales until 1825, Tasmania was then constituted as a separate colony. The transportation of convicts ended in 1853 as a result of local opposition. In the 1850s the British established constitutional self-government in the colony and the name was officially changed to Tasmania. In 1901, Tasmania was federated as a state in the Commonwealth of Australia. The nominal head of the state government is the governor, appointed by the British crown on advice of the cabinet; however, actual executive powers are exercised by the premier and the cabinet, who are responsible to the bicameral state parliament.