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Dorset is largely rural with many small villages, few large towns, no cities and no motorways. The largest conurbation is the South East Dorset conurbation which consists of the seaside resort of Bournemouth, the historic port of Poole and the town of Christchurch plus many villages. Bournemouth was created in the Victorian era when sea bathing became popular. As an example of how affluent the area has become, Sandbanks in Poole was worthless land unwanted by farmers in the nineteenth century, but is said to be amongst the highest land values by area in the world. Originally part of Hampshire, Bournemouth and Christchurch were added to boundaries of Dorset following the reorganisation of local government in 1974.

The other two major settlements in the county are Dorchester, (the county town), and Weymouth, one of the first tourist towns, frequented by George III, and still very popular today. Blandford Forum, Sherborne, Gillingham, Shaftesbury and Sturminster Newton are historical market towns which serve the farms and villages of the Blackmore Vale (Hardy's Vale of the Little Dairies). Blandford is home to the Badger brewery of Hall and Woodhouse. Bridport, Lyme Regis, Wareham and Wimborne Minster are also market towns. Lyme Regis and Swanage are small coastal towns popular with tourists.

Still in construction on the western edge of Dorchester is the experimental new town of Poundbury (expected to be fully completed by 2025), commissioned and co-designed by Prince Charles. The suburb is designed to integrate residential and retail buildings and counter the growth of dormitory towns and car-oriented development.

Dorset is connected to London by two main railway lines. The West of England Main Line runs through the north of the county at Gillingham and Sherborne (there is also a station at Templecombe, just over the Somerset border). Running west to Crewkerne (Somerset) and Axminster (Devon) it provides a service for those who live in the western districts of Dorset. The South Western Main Line runs through the south at Bournemouth, Poole, Dorchester and the terminus at Weymouth. Additionally, the Heart of Wessex Line runs from Weymouth to Bristol. Dorset is one of only four non metropolitan counties in England not to have a single motorway. The A303, A31 and A35 trunk roads run through the county. The only passenger airport in the county is Bournemouth International Airport, but there are two passenger sea ports, at Poole and Weymouth. There are no major trunk routes to the North.

Despite these disadvantages, a flourishing bus service has been built up in the last fifteen years taking advantage of central and local government grants. To compensate for the missing rail link west of Dorchester one service bus runs regularly along the southerly A35 from Weymouth to Axminster. The Jurassic Coast service provides through travel from Poole to Exeter, exploiting a popular tourist route. Other routes connect towns in Somerset, Wiltshire and Hampshire. The number of services available to rural towns and villages has also increased over recent years.

Telecommunications company BT is to install a line giving "super-fast broadband connection" through Dorset, to provide for the increased demand during the 2012 Summer Olympic Games. A campaign for the connection to remain after the Olympic Games began after the announcement, but BT has said it does not want to speculate so early.

Responsibility for education in Dorset is divided between three local authorities: Bournemouth and Poole unitary authorities and Dorset County Council, which covers the rest of the county.