Cusco, also spelled Cuzco, is a department and region in Peru and is the fourth largest department in the country, after Madre de Dios, Ucayali, and Loreto. It borders the departments of Ucayali on the north; Madre de Dios and Puno on the east; Arequipa on the south; and Apurímac, Ayacucho and Junín on the west. Its capital is Cusco, the historical capital of th…Cusco, also spelled Cuzco, is a department and region in Peru and is the fourth largest department in the country, after Madre de Dios, Ucayali, and Loreto. It borders the departments of Ucayali on the north; Madre de Dios and Puno on the east; Arequipa on the south; and Apurímac, Ayacucho and Junín on the west. Its capital is Cusco, the historical capital of the Inca Empire.