Potosí, known as Villa Imperial de Potosí in the colonial period, is the capital city and a municipality of the Department of Potosí in Bolivia. It is one of the highest cities in the world at a nominal 4,067 m (13,343 ft). Diego Huallpa [es], an indigenous prospector, is traditionally credited with the discovery of the Cerro Rico in 1545, which led to the founding and rapid growth of Potosí due to its extraordinary silver wealth.

For centuries, it was the location of the Spanish colonial silver mint. A considerable amount of the city's colonial architecture has been preserved in the historic center of the city, which—along with the globally important Cerro Rico de Potosí—are part of a designated UNESCO World Heritage Site.

Potosí lies at the foot of the Cerro de Potosí—sometimes referred to as the Cerro Rico ("rich mountain")—a mountain popularly conceived of as being "made of" silver ore that dominates the city. The Cerro Rico is the reason for Potosí's historical importance since it was the major supply of silver for the Spanish Empire until Guanajuato in Mexico surpassed it in the 18th century. At the turn of the 16th/17th centuries, it was the second largest city in the world, after London.

The silver was taken by llama and mule train to the Pacific coast, shipped north to Panama City, and carried by mule train across the isthmus of Panama to Nombre de Dios or Portobelo, whence it was taken to Spain on the Spanish treasure fleets. Some of the silver also made its way east to Buenos Aires, via the Rio de la Plata, or to Acapulco, Mexico, where it was sent via the Manila Galleons to buy Asian products. Cerro de Potosí's peak is 4,824 m (15,827 ft) above sea level.

Today, Potosí continues to be an important mining center, and is the largest urban center in the Department of Potosí. A growing city, Potosí is now famous for its well-preserved colonial architecture, and unusual geographic setting as one of the highest cities in the world. It features a rare cold highland climate, and is marked by its long dry period, and short but strong wet season. While famous for its dominance as a mining center in early Spanish colonial history, Potosí still sits at one of the largest silver deposit systems in the world.

There is no authoritative etymology for the word Potosí. According to legend, in about 1462, Huayna Capac, the eleventh Sapa Inca of what by then was known as the Inca Empire "set out for Ccolque Porco and Andaccaua, the location of his mines from which were taken innumerable arrobas of silver" (an arroba is a Spanish unit of weight equivalent to approximately 25 lb (11 kg)). Before leaving there, he saw Potosí, and admiring its beauty and grandeur, he said (speaking to those of his Court):

"This doubtless must have much silver in its heart"; whereby he subsequently ordered his vassals to go to Ccolque Porco ... and work the mines and remove from them all the rich metal. They did so, and having brought their tools of flint and reinforced wood, they climbed the hill; and after having probed for its veins, they were about to open those veins when they heard a frightening thunderous noise which shook the whole hill, and after this, they heard a voice which said: "Do not take the silver from this hill, because it is destined for other masters." Amazed at hearing this reasoning, the Incan vassals desisted in their purpose and returned to Porco and told the king what had happened; relating the occurrence in their own language, on coming to the word noise, they said "Potocsí" which means there was a great thunderous noise, and from that later was derived (corrupting a letter) the name of Potosí.^{[citation needed]}

It is believed^{[by whom?]} that Potosí is a Quechua word.^{[citation needed]} However, in Quechua the root p'otoj does not refer to a thunderous noise, whereas it does in Aymara. Thus, if Potosí encompasses the idea of a thunderous noise, the location would have an Aymaran root rather than a Quechuan.^{[citation needed]}