We present a selective survey of the main results obtained in spatial economic theory. Our focus is on "rm location. We start with the simplest location problem and proceed to recent models of industrial location in general equilibrium. The middle section is a review of what has been accomplished in the literature on spatial pricing and spatial competition. We conclude with a discussion of recent models of economic geography which explain the uneven spatial distribution of economic activity. 1999 Elsevier Science Ltd. All rights reserved.