Oaxaca, wah HAH kah, officially Oaxaca de Juarez (pop. 256,848), is the capital of Oaxaca, a state in southern Mexico. It stands in a rich mining, farming, and forest region. Oaxaca has won fame for handicrafts. The city's economy relies largely on tourism and the sale of cattle, dairy products, and hardwoods. The ruins of two ancient Indian cities, Mitla and Monte Alban, lie near Oaxaca. Some historians believe the Aztec founded Oaxaca in 1486. But the Zapotec and the Mixtec Indians had lived in the area since the time of the early Christians. The people of colonial Oaxaca produced impressive architecture.