As it had good relations with its neighbors, Dubrovnik was allowed to trade, trading both in the Orient and the Mediterranean. With numerous countries and towns it had special agreements and was not paying taxes on goods sold or transported trough some country's.

During several centuries Dubrovnik grew into the most powerful economic center in the south of the Adriatic and it developed a powerful fleet of merchant and war ships. Dubrovnik had over 200 merchant ships called Argosy.
At the Golden Period of Dubrovnik the territory of the Republic extended from Klek-Neum in the north to Sutorina (Boka Kotorska) in the south and a few kilometers inland. It included the islands of Šipan, Lopud and Koloeep (after 1080), Mljet (1141) and
Lastovo (1216), the town of Ston (1298) and the Pelješac Peninsula (1399). The coastal territory of the Republic without islands was approximately 120 kilometers in length.
Dubrovnik Republic also ruled Koreula, Brae and Hvar for a brief period (1414-1417), but was forced to release them to Venice.