Chefchaouen or Chaouen, as it is often called by Moroccans, is a popular tourist destination given its proximity to Tangier and the Spanish border. The name simply refers to the shapes of the mountain tops that tower over the town, that look like the two horns (chaoua) of a goat. "Chef Chaouen" literally means "look at the horns". There are approximately two hundred hotels in this tiny mountain village in order to host the summer influx of European tourists. One distinction possessed by Chefchaouen is its blue-rinsed houses and buildings, a tradition that comes from the town's former Jewish population.

Chefchaouen is a popular shopping destination as well, as it offers many native handicrafts that are not available elsewhere in Morocco, such as wool garments and woven blankets. The goat cheese native to the area is also popular with tourists.

The countryside around it has a reputation for being a prolific source of marijuana, as the land is unsuitable for much else. The Chefchaouen region is one of the main producers of cannabis in Morocco. Hashish is subsequently sold all over town, but is mostly the domain of native Chaouenis.

The growing tourist industry is geared especially towards Spanish tourists, who are especially numerous during great Catholic feasts like Semana Santa and Christmas.Chefchaouen was visited by Joe Orton and Kenneth Halliwell in 1967. They adored it finding it very 'Golden Bough-ish'. Orton mentions their trip in the Orton Diaries.