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(If you need help deciding whether your case belongs in federal or state court, see Nolo's article Subject Matter Jurisdiction: Should I File in Federal or State Court?)
The term venue refers to a proper place (county or judicial district) in which to file a lawsuit. Venue rules are developed by state courts to protect the defendant from having a case filed in an inconvenient court (for example, at the other end of the state).
For venue purposes, the correct judicial district can normally be the district in which:
More than one judicial district can be the correct venue for a lawsuit. Lawyers call the process of deciding which court is best for a plaintiff's case "forum shopping."
As long as you abide by the above rules, you can choose the court most convenient to you. But if you don't want the defendant to object to your choice, you may want to file the lawsuit in the court closest to where the defendant lives or does business.
Example: George and Jerry are both citizens of Texas. George lives in North County, near Oklahoma, and Jerry lives 600 miles away in South County, near Mexico. One day George drives south and Jerry drives north, and they collide in the middle of Texas. George wants to sue Jerry. Venue rules probably require George to sue Jerry either in South County (where Jerry resides) or where the collision occurred. George's home base, North County, is not a proper venue for the lawsuit, so Jerry is spared the inconvenience of having to defend himself there.