The economy of Sambalpur District is basically dependent on agriculture and secondly on forests. Forests play an important role in the economy in terms of contribution to revenue, Domestic Product as well as dependence of people for livelihood. The people living adjacent to the reserved forests of Sambalpur Forest Division are heavily dependent on these forests. In the past Sambalpur has been a great centre of diamond trade. Kendu leaf (Diospyros Melanoxylon) is also produced in Sambalpur. Tendu leaf is one of the most important non-wood forest products of Sambalpur and is also called as green gold of Orissa. Lately industrialisation has started in the district and the prime industries of power, alumina and steel have been established. The place is famous for its globally renowned textile bounded patterns and fabrics locally known as "Baandha". Sambalpur is famous for its Hand loom textile works. Popularly known as Sambalpuri Textile. It has earned international fame for its unique pattern, design and texture. Apart from textiles, Samabalpur has a rich tribal heritage and fabulous forestlands.

In 2006 the Ministry of Panchayati Raj named Sambalpur one of the country's 250 most backward districts (out of a total of 640). It is one of the 19 districts in Orissa currently receiving funds from the Backward Regions Grant Fund Programme (BRGF).

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