The necessity of developing measures for the regional development of Kyrgyzstan, increasing the economic potential, and improving the infrastructure for industrial and social purposes is shown. In this regard, the development and revival of the economies of towns, including small ones, are considered as a priority direction in the implementation of these goals. It was revealed that the small towns of the country, due to the diversity of historical formation, economic-geographic location (EGP), and socioeconomic values, differ from each other. Their main problems are the lack of economic assets, the scarcity of the city budget, remoteness from large centers, unemployment, and a decrease in living standards. The necessity of a comprehensive study of the potential and development prospects of small towns has been substantiated; a thorough analysis of their economic and geographic position is considered as the most important. As a result, the individual features of these towns were revealed. For this purpose, a study was made of the economic and geographic positions of small towns in the southern region of Kyrgyzstan concerning their status regarding transport, industrial, agricultural assessment, recreational, market and innovation relations. The results showed that the towns in the region range from 3.8 (Kochkor-Ata) to 2.3 points (Sulukta) according to the degree of EGP by components. To generalize these series, the towns were combined into three groups: those with the most advantageous economic and geographic location; those with a favorable economic and geographic location; and towns with a relatively favorable economic and geographic position. It was shown that the degree of profitability of the economic and geographic position of small towns in the region does not have a territorial sequence, i.e., it is not determined by the "center-periphery" pattern. The study enabled the determination of the general potential for the development of the urban economy, planning the construction of infrastructure facilities, and revival of the industrial sector of the economy as a city-forming factor.