Located in the mountains of Snowdonia, the town's slate industry declined during the early 20th century. The town's economy is now largely dependent on tourism. Although the town is in the centre of the Snowdonia National Park, the boundaries of the Park exclude the town and its substantial slate waste heaps. Blaenau Ffestiniog is known as the town with one of the highest rainfall in Wales. The town has several reservoirs, one of which supplies the Ffestiniog Hydro Power Station with water. Stwlan Dam can be seen in between two of the main mountains in the area, Moelwyn Bach and Moelwyn Mawr. The mountains around Blaenau Ffestiniog form the watershed between the River Lledr flowing to the north (a tributary of the River Conwy) and the River Dwyryd flowing to the west.