Clay County was the forty-seventh county in order of formation and is located in the foothills of the Cumberland Mountains of the Appalachian Mountain Range of southeast Kentucky. The county is bordered by Jackson, Owsley, Perry, Leslie, Bell, Knox, and Laurel counties. It was created from Madison, Floyd, and Knox counties on April 1, 1807. Clay County was later divided to form parts of Jackson, Owsley, Leslie, Lee, Breathitt, Knott, Perry, and Harlan counties. It reached its present size, 471 square miles, in 1880.
Clay County was named for General Green Clay, a Madison County legislator and early Kentucky surveyor. Most of the heavily wooded county, approximately 61,000 acres, falls within the Redbird Purchase Unit of the Daniel Boone National Forest. Major contributors to the economy are tobacco, timber, corn, and coal. The county's largest town and county seat is Manchester.