Berastagi is a small town situated on a crossroads on the main route linking the Batak highlands of Northern Sumatra to the coastal city of Medan. The village rose to significance when Dutch settlers in Sumatra opened a boarding school there in the 1920s.

The main economic activities in the town centre on the vegetable market and on tourism. The main attraction of the town is the volcano Gunung Sibayak with its hot springs.

The town is also a stop on the way to Lake Toba.