The DOC area named after the city of the same name is located on the Portuguese peninsula Península Setúbal in the central west of Portugal near the capital Lisbon. It comprises the urban districts of Palmela and Setúbal and is part of the Península de Setúbal region (formerly Terras do Sado). The Mediterranean climate, influenced by the nearby Atlantic Ocean, is characterized by hot, dry summers and rainy winters. The plain has sandy soils, while the hilly areas, which are considered better, are made up of limestone and clay.
The white wines are made from the varieties Alvarinho, Antão Vaz, Arinto, Chardonnay, Fernão Pires, Loureiro, Malvasia Fina, Moscatel Galego Branco(Muscat Blanc), Moscatel de Setúbal(Muscat d'Alexandrie), Pinot Blanc, Rabo de Ovelha, Roupeiro(Síria), Sauvignon Blanc, Sémillon, Verdelho and Viosinho. The red wines are produced from the varieties Alfrocheiro Preto, Alicante Henri Bouschet, Aragonez(Tempranillo), Bastardo, Cabernet Sauvignon, Merlot, Periquita(Castelão Francês), Petit Verdot, Syrah, Tannat, Tinta Miúda(Graciano), Tinto Cão, Touriga Nacional and Trincadeira das Pratas. Well-known producers are Caves Alianca, J. P. Vinhos, Quinta da Bacalhôa and Quinta de Camarate (all three are owned by the large trading house Fonseca).