Apart from an economy which has traditionally been based on agriculture, in the late 1990s the major economic base of Matera, and of surrounding cities, is the production of upholstered furniture.

The town lies athwart a small canyon, which has been eroded in the course of years by a small stream, the Gravina.

History

In AD 664 Matera was conquered by the Lombards and became part of the Duchy of Benevento. In the 7th and 8th centuries the nearby grottos were colonized by both Benedictine and Greek-Orthodox monastic institutions.

The 9th and 10th centuries were characterized by the struggle between Saracens, Byzantines and the German emperors, including Louis II, who destroyed the city. After the settlement of the Normans in Apulia, Matera was ruled by William Iron-Arm from 1043.

After a short communal phase and a series of pestilences and earthquakes, the city in the fifteenth century became an Aragonese possession, and was given in fief to the barons of the Tramontano family. In 1514, however, the population rebelled against the oppression and killed Count Giovanni Carlo Tramontano. In the seventeenth century Matera was handed over to the Orsini and then became part of the Terre d'Otranto di Puglia. Later it was capital of Basilicata, a position it retained until 1806, when Joseph Bonaparte reassigned it to Potenza.

In 1927 it became capital of the Matera province. On September 21, 1943, the Materani rose against the German occupation, the first Italian city to fight against the Wehrmacht.

The Sassi

Matera has gained international fame for its ancient town, the "Sassi di Matera" (meaning "stones of Matera"). The Sassi originate from a prehistoric (troglodyte) settlement, and are suspected to be some of the first human settlements in Italy.

The Sassi are houses dug into the tuff rock itself, which is characteristic of Basilicata and Puglia. Many of these "houses" are really only caverns, and the streets in some parts of the Sassi often are located on the rooftops of other houses. The ancient town grew in height on one slope of the ravine created by a river that is now a small stream. The ravine is known locally as "la Gravina".

In the 1950s, the government of Italy forcefully relocated most of the population of the Sassi to areas of the developing modern city. However, people continued to live in the Sassi, and according to the English Fodor's guide: cquote: Matera is the only place in the world where people can boast to be still living in the same houses of their ancestors of 9,000 years ago.