Knoxville's stable economy is one of the region's major assets. It is highly diversified with no one employment sector accounting for more than 22 percent of the area's total employment. Recent years have seen substantial growth in the areas of trade, transportation, utilities, and financial activities.

Lending a major boost to Knoxville's economy is The University of Tennessee, the Tennessee Valley Authority's headquarters in Knoxville, and ORNL, a major U.S. Department of Energy facility, in nearby Oak Ridge. The University of Tennessee is the largest employer in the Knoxville area with more than 10,000 faculty and staff. Tennova Health Care is the second largest employer with more than 8,000 employees.

Another contributing factor to Knoxville's strong economy is its location. The city is within one day's drive of three-fourths of the U.S. population.

Knoxville has a Foreign Trade Zone, is an inland Port of Entry, and has a U.S. Customs Office.

Because of navigation improvements made by the Tennessee Valley Authority on the Tennessee River system, Knoxville enjoys barge commerce with 21 other states on the Tennessee, Ohio, and Mississippi Rivers. This interconnected inland water system runs from the Gulf of Mexico to the Great Lakes, allowing shipments on water to such distant points as Houston, Tampa, Pittsburgh, Minneapolis, and Little Rock.

As of 2004, Knoxville had more than 380,000 people in its labor force.