
In terms of population, Arrazua-Ubarrundia is the smallest municipality in the district or "Cuadrilla" of Zuia. At 57 km2, it is almost as small as Legutiano, and like the latter much of its land was lost to the reservoir which dams the waters of the river Zadorra (or Ullibarri-Ganboa), the longest and biggest river in the province. The reservoir dates from 1947, and provides water and electricity for the cities of Bilbao and Vitoria-Gasteiz. It has also become a major centre for leisure activities, water sports, and recreation.
The landscape of the municipality is very varied: in the south, where most of the villages lie, is flat and falls within the plains of Alava/ Araba (Durana is at 541 m above sea level). This has enabled broad areas to be used for farming.
The area around the reservoir is one of low hills (Urbina, 698 m, Santa Cruz, 697 m, Iturriaga, 625 m) which protrude like woody islets over the southern reaches of the reservoir, surrounded by brush land.

North of the reservoir is an area where cattle graze, and beyond this the terrain climbs sharply to the Sierra de Elgea hills (also known as the Arlabán hills). Within a few kilometres the altitude rises enormously: Landa stands at 555 m, but nearby are the peaks of Usokoaitza (912 m), Arkamo (875 m) and Isuskitza (800 m); the landscape changes suddenly from pasture land to slopes repopulated with conifers and dotted with smaller, older beech and oak woods.
The reservoir flooded much of the land formerly used to grow potatoes as well as corn and other cereals, forcing a major change in the local economy. The number of arable concerns dropped sharply, with some farmers moving into cattle farming. Even so, between the arable farms in the south and the cattle farms in the north, a bigger percentage of the population work in the primary sector than in any other municipality in the area.
There are good road links with the industrial estates in Goiain and the Alto Deba area, and with Agurain via the N-1 trunk road, and many small industrial concerns have been set up scattered over a wide area. These provide work for a large part of the local population.
The service sector received a major boost with the construction of the reservoir and the consequent potential for recreational areas. Sailing clubs, leisure areas, the island hostel of Zuaza, bathing areas and bike trails leading up from Vitoria-Gasteiz have all helped to generate activity for the municipality. Several restaurants also exist in Ullibarri, Landa, Medibil and Durana.