Mexico’s main export tequila and the Latin name of the “blue agave” from which it is made are named after this town. The town is surrounded entirely by agave, a plant that takes eight years to mature. When making wine, the sugary pineapple-like round stems in the middle of the agave must be picked, steamed, chopped, juiced, fermented, and distilled. According to Mexican law, cane sugar or corn can be added during fermentation, but it must not exceed 49.

There are 24 major Tequila distilleries. The largest and most famous in the US market are Cuervo and Sauza. These two companies were originally the main competitors in the market. Later, through marriage, it became a cooperative manufacturer, and later it was acquired by other large companies.

Sauza is the first Tequila brewery built by Don Cenobio Sauza in 1873. It was originally a family business and has been run by the family. In 1988, it merged with the Pedro Domecq Group; in 1994, the Pedro Domecq Group merged with the British Allied Lyons Group to become the Allied Domecq Group, but the Sauza brand has always been retained.

Cuervo was founded by Jose Antonio de Cuervo. He received a fief from the King of Spain in 1758 when Mexico was not yet independent and began brewing tequila in Mexico. Because Cuervo means crow in Spanish, there is a crow on the Cuervo wine label. Since the Cuervo business is often inherited by heiresses in the family, it has changed its surname several times, but its trademark has never changed. The company was eventually merged into Guinness, an Irish company founded in 1759, which merged with GrandMet in the United States in 1997 to form the UDV Diageo Group. Today, Cuervo and Sauza remain the most famous brands of tequila.

Almost all of the town’s economic activity revolves around the production of tequila. As tequila's reputation in the international market increases, the town of Tequila hosts a tequila festival every year, and the proportion of tourism revenue begins to increase.