Map - Stepanakert (Xankandi Sahari)

Stepanakert (Ստեփանակերտ, Eastern ), or Khankendi (Xankəndi, ), is the de facto capital and the largest city of the breakaway Republic of Artsakh, de jure part of Azerbaijan, located within the disputed region of Nagorno-Karabakh. The city is located in a valley on the eastern slopes of the Karabakh mountain range, on the left bank of the Karkar river.

The area that would become Stepanakert was originally an Armenian settlement named Vararakn. During the Soviet period, the city was made the capital of the Nagorno-Karabakh Autonomous Oblast, becoming a hub for economic and industrial activity. In addition, the city became a hotbed for political activity, serving as the center for Armenian demonstrations calling for the unification of Nagorno-Karabakh with Armenia. Stepanakert suffered extensive damage following the dissolution of the Soviet Union and the outbreak of the First Nagorno-Karabakh War and passed into the hands of local Armenians with the establishment of the Republic of Artsakh.

The city is a regional center of education and culture, being home to Artsakh University, musical schools, and a palace of culture. The economy is based on the service industry and has varied enterprises, food processing, wine making, and silk weaving being the most important. As of 2021, the population of Stepanakert is 75,000.

Medieval Armenian sources attest to a settlement in the locale called Vararakn (Վարարակն). Vararakn remained the local Armenian name for the town until 1923.

Most Azerbaijani sources claim that the settlement was built in late 18th century, as a place of rest for the heads of the Karabakh Khanate. In the first years, it was known as "Khan's village" (Xanın kəndi) because only the khan's family and his relatives lived there. By the 19th century, the settlement was renamed Khankendi ("village of the khan" in Azerbaijani).

The town was renamed Stepanakert ("city of Stepan") in 1923, after Armenian Bolshevik revolutionary Stepan Shahumian. The name is formed from the words Stepan (Ստեփան) and kert (կերտ).