Baku Is the capital and largest city in Azerbaijan, as well as the largest city on the Caspian Sea and the Caucasus region. Baku is 28 meters (92 feet) below sea level, making it the lowest lying national capital in the world and also the largest city in the world below sea level. It is located on the southern shore of Abshirun Peninsula, along with Baku Bay. At the beginning of 2009, the urban population of Baku was estimated at 2 million people. Officially, about 25 percent of all the country’s population live in the Baku metropolitan area.