
At 46 km2, this is the smallest municipality in the "Cuadrilla" of Zuia. Much of its territory was flooded in the early 1950's to form the Urrunaga reservoir (also called Santa Engracia and the Legutiano reservoir), which now provides water for the cities of Vitoria-Gasteiz and Bilbao.
It was chosen as a reservoir site because it is a river basin surrounded by low hills (Arlabán/Jarindo and Albertia, Motxotegi and Oketa and their foothills). Water flows in from the river Undebe, running down from near Gorbeia, and from the Urkiola, which takes its name from the country shrine beside its source.
The area around the reservoir affords outstanding panoramic views over the thick woods on its northern bank (mostly beech and oak trees on the slopes of the 811 m summit of Mount Motxotegi and the 736 m Mount Tantaibakar); and the pasture land along its southern bank dotted with groves of oaks and gall oaks. Mount Albertia (868 m), to the west of the Legutiano village, is a beautiful mosaic of oaks, durmast oaks, beech and pines.

The "shoreline" of the reservoir is occupied by reed beds, which are home to an interesting range of water birds. The waters of the reservoir teem with fish and are an angler's delight.
Most of the municipality's farm land was lost when the reservoir was built. In the area, only Aramaio now has a lower percentage of its population working on the land. Even so, some large dairy farms remain in Legutiano and there is still some growing of rye, wheat and maize and a large amount of grazing land.
The predominant sector in the economy is industry. in Goiain Legutiano has one of the province's biggest industrial estates, with over a hundred companies on an area covering more than 3 million square metres. Hundreds of people commute there from Vitoria and other nearby towns and villages. Another, smaller industrial estate has also been set up just outside Legutiano village.
The reservoir has boosted the service sector with the creation of recreation and leisure areas, an international boat racing course, fishing reserves, etc. In the wake of these activities, bars, restaurants and accommodation have also increased. The many bars and restaurants in Legutiano itself are supplemented by a hotel and rural guest house in Elosu, a sea-food restaurant in Urrunaga, a pottery workshop and museum in Ollerías, the Larrabea golf club, etc.