Abstract: The object of this article is the competitive ability of a region within the current economic system of the state. The subject of this research is a region as one of the junction centers, which employs territorial state policy, economic interests of the region itself, and large capital. In modern world, the competitive ability of the subjects of the state forms as a result multiple factors, particularly economic, social, and political. Thus, the questions and issues regarding the competitive ability of the regions under the conditions of complicated transformation processes have acquired special relevance in the contemporary economic science. The authors examine the theoretical grounds of development of the competitive ability of a modern region, give analysis to the definitions of the concepts of “competitive ability” and “competition”, suggesting that the latter implies a certain dynamic action of economic subjects, contention between themselves as a competitive process. Competitive ability, in turn, implicates the opportunity for a specific subject to participate in the indicated action, and thus, the possession of certain qualities that provide such opportunity. The analyzed determinants are the basic in determination of the competitive ability given by the authors. The scientific novelty lies in the discovered dependence between the level of competitive ability and availability of the factors of production.