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Turkish Cypriots, together with Turkey, do not accept the Republic's rule over the whole island and call it the "Greek Authority of Southern Cyprus". They control the northern third of the island, following a military invasion by Turkey in 1974. This happened following a coup sponsored by the military regime of Greece, see: the 1974 crisis between Greece and Turkey.

EU law is currently not applied in the Turkish occupied north. The Union has promised to aid and to work towards lifting the trade sanctions imposed by the European Court, but they have ruled out diplomatic recognition of northern Cyprus.

Greek language is predominantly spoken in the south, Turkish language in the north. This delineation of languages is true only in the present period, due to the post-1974 division of the island, which involved an expulsion of Greek Cypriots from the north and the analoguous move of Turkish Cypriots from the south. Historically however, Greek (its Cypriot dialect) was spoken by nearly 82% of the population, which was evenly distributed along the entire area of Cyprus, north and south. Similarly, Turkish speakers were evenly distributed. English is widely used.

Cyprus has been liberalizing its trade regime by eliminating import quotas and licenses and lowering tariffs on most products as a result of its obligations under the new world trade agreement and its Customs Union agreement with the European Union. As a result, U.S. products are becoming more competitive in Cyprus and prospects for further expansion of bilateral trade ties are excellent.

The Turkish Cypriot area proclaimed its independence in 1975, and the self-styled Turkish Republic of Northern Cyprus was established in 1983. This state was recognised only by Turkey. Furthermore, Organization of the Islamic Conference granted it observer member status under the name of "Turkish Cypriot State". The other power with territory on Cyprus is the United Kingdom. Under the independence agreement, the UK retained title to two small areas on the southern coast of the island, around Akrotiri and Dhekelia, known collectively as the UK sovereign base areas. They are used to host military bases.

Government computerization and telecommunications development, two of the priorities of the government's 5-year development plan (1994-1998), provide excellent opportunities for U.S. exports. Sales of computer-assisted design systems, new capital equipment for textile, clothing, footwear production, medical equipment, environmental equipment, and services are also expected to grow. U.S. pressure resulted in the adoption of a new copyright law in 1994 and a new patent law in 1998.

Folk music on Cyprus is similar to the folk music of Greece, and includes dances like the sousta, syrtos, zeimbekikos, dachas, and the kartsilamdhes.

Both greek and turkish cypriots use the violin as the main solo instrument, accompanied by laouto (form of lute) for greek cypriots and ud for turkish cypriots. Accordion, percussion and recorder (pithkiavli) are also used.

Negotiations have been ongoing for years to reunite the island, but have not as yet seen substantial success. A United Nations plan, announced on 31 March 2004 following talks in Switzerland, was put to both sides in separate referenda on 24 April 2004.

Cyprus changed hands numerous times prior to the Medieval era, and was an important outpost of Christianity and European civilization during the Crusades. The tumultuous history introduced a variety of styles, including music from Armenia, France, Greece and Arabs. The island's peak as a cultural capital of Europe occurred from 1359 to 1432.

Since 1974, Cyprus has been divided de facto into the government-controlled southern two-thirds of the island and the Turkish-Cypriot northern one-third. The Government of the Republic of Cyprus has continued as the internationally recognized authority; in practice, its power extends only to the Greek Cypriot-controlled areas.

The U.S. embassy in Nicosia sponsors a popular pavilion for American products at the annual Cyprus International State Fair, hosts the Commercial Awards dinner, and organizes other events to promote U.S. products throughout the year. Total U.S. exports to Cyprus were about $700 million in 1997 (compared with $670 million in 1996), making the U.S. Cyprus' number-one supplier of total imports for the third year in a row. Exports include American tobacco and tobacco products, automatic data processing and other machinery, and cereals. Principal U.S. imports from Cyprus consist of clothing, footwear, steel tubes and pipes, dairy products, and various food items.