Geographically, it is located in an important location on the Peć Bistrica, a tributary of the White Drin to the east of the Prokletije Mountains. The Rugova Canyon is one of Europe's longest and deepest canyons and is about three kilometres from the city of Peć. The city is located some 250 kilometres (155 miles) north of Tirana, Albania, 150 kilometres (93 miles) north-west of Skopje, Republic of Macedonia, 85 kilometres (52 miles) west of Pristina, Kosovo and some 280 kilometres (173 miles) east of Podgorica, Montenegro.
In medieval times the city was the seat of the Serbian Orthodox Church in 1346. Later in 1899, the Albanian political organization, League of Peja, was established in the city. The patriarchal monastery of Peć is a UNESCO World Heritage Site as part of the Medieval Monuments in Kosovo.
In Serbian, peć means "furnace" or "cave", and its name is probably connected with nearby caves in the Rugova Canyon which served as hermit cells for Serbian Orthodox monks. In medieval Ragusan documents, the Serbian name of the city (Peć, lit. "furnace") is sometimes translated as Forno, meaning "furnace" in Italian. During Ottoman rule, it was known as Ottoman Turkish İpek (ايپك). The Albanian name's definite form is Peja and the indefinite Pejë. Other names of the city include Latin Pescium and Greek Episkion (Επισκιον).
The city is located in a strategic position on the Pećka Bistrica, a tributary of the White Drin to the east of the Prokletije. The medieval city was possibly built on the ruins of Siparant(um), a Roman municipium (town or city). The area has the most unearthed stelae in all of Kosovo.
Slavs (Sclaveni and Antes) settled the Balkans, heavily depopulated by "barbarians", in the 6th century. The Byzantine Empire and the First Bulgarian Empire fought for control of the area until it finally fell under full Serbian control. Between 1180 and 1190, Serbian Grand Prince Stefan Nemanja liberated Peć with its surrounding župa (district) of Hvosno from the Byzantine Empire, thus establishing Serbian rule over the city of Peć for next 300 years. In 1220, Serbian King Stefan Nemanjić donated Peć and several surrounding villages to his newly founded monastery of Žiča. As Žiča was the seat of a Serbian archbishop, Peć came under direct rule of Serbian archbishops and later patriarchs who built their residences and numerous churches in the city starting with the church of Holy Apostles built by archbishop Saint Arsenije I Sremac. After the Žiča monastery was burned by the Cumans (between 1276 and 1292) the seat of Serbian archbishop was transferred to a more secure location - Patriarchal Monastery of Peć where it remained until the abolition of the Serbian Patriarchate of Peć in 1766.