The coral islands of Bermuda are composed of a layer 200 feet (60 m) thick of marine limestone that caps an extinct and submerged volcanic mountain range rising more than 14,000 feet (4,300 m) above the ocean floor; the limestone surface is overlain by a shallow layer of fertile soil. The islands are fringed by coral reefs and have no lakes or rivers, but the soil is highly porous, and standing water is not a problem.

The climate is mild, humid, and equable. August is the warmest month, with an average daytime high of 86° F (30° C), and February is the coldest month, with an average nighttime low of 57° F (14° C). Mean annual precipitation is about 57 inches (1,450 mm). Occasional dry spells can be critical, as the supply of drinking water depends almost entirely on rainfall. (There also are a number of wells and seawater distillation plants). The vegetation is subtropical and includes flowering shrubs such as bougainvillea, Easter lilies, oleander, hibiscus, and poinsettia. Palm, pine, casuarina, and mangrove trees are found on most of the islands. A number of migratory birds visit the islands annually; other wildlife is limited to lizards and frogs.

About three-fifths of the population is descended from African slaves brought to Bermuda before Britain outlawed the slave trade in 1807. Whites include the British and descendants of Portuguese labourers from Madeira and the Azores who went to Bermuda in the mid-19th century. English is the official language, but some Portuguese is also spoken. Christianity predominates, and more than one-fourth of the population is Anglican. Bermuda's rate of population growth is low by world standards, comparable to that of the United States. Less than one-fifth of the population is younger than 15 years.

Virtually all of Bermuda's larger islands are inhabited, and Main Island has the largest concentration of people. Bermuda has one of the world's highest population densities.

Bermuda has a predominantly market economy based on tourism and international finance. The gross national product (GNP) is growing more rapidly than the population, and the GNP per capita is one of the highest in the world.

Agriculture is of negligible importance in the overall economy, and most food must be imported. Fresh vegetables, bananas, citrus fruits, milk, eggs, and honey are produced locally. There is a small fishing industry. Mineral industries are limited to the production of sand and limestone for local construction. There are a few light manufacturing industries that produce paint, pharmaceuticals, electronic wares, and printed material.

Tourism and international financial services account for the major share of the GNP and employ virtually all the workforce directly or indirectly. More than 500,000 tourists visit Bermuda each year; most come from the United States. Airlines account for the majority of arrivals, but there are also dozens of calls by cruise ships each year. Bermuda has low income taxes; the government derives most of its revenues from tariffs and various taxes on real estate and tourism. As a result the colony has become an important offshore financial centre, and many insurance and investment companies have established offices there. Principal trading partners include the United States, which supplies nearly three-fourths of Bermuda's imports by value; Canada; Japan; and the Netherlands Antilles, which supplies oil imports.

Bermuda is an internally self-governing British (British Empire) colony with a parliamentary government. Under its 1968 constitution, the British monarch, represented by the governor, is the head of state. The governor maintains control over external affairs, defense, internal security, and the police but acts on the advice of the cabinet, led by the premier, who is head of government and of the majority party in the legislature. The bicameral legislature is composed of the House of Assembly, with 40 members elected to terms of up to five years, and the Senate, with 11 members appointed by the governor (5 on the advice of the premier, 3 on the advice of the leader of the opposition, and 3 at the governor's discretion. The Supreme Court heads the judicial system. The system of local government comprises nine parishes: St. George's, Hamilton, Smith's, Devonshire, Pembroke, Paget, Warwick, Southampton, and Sandys.

Bermuda enjoys a high standard of health, as reflected in the average life expectancy of about 73 years for men and 79 years for women and in the relatively low infant-mortality rate. Social-security provisions, first enacted in 1965, include old-age, disability, and survivor pensions and compulsory hospitalization insurance for all citizens.

Nearly the entire population is literate. Education is compulsory and free between the ages of 5 and 16. There is one junior college, and government scholarships are available for overseas study.

In 1511 an island named “Bermudas” was depicted on a map in Spain. The Spanish navigator Fernández de Oviedo sailed close to the islands in 1515 and attributed their discovery to his countryman Juan Bermúdez, possibly as early as 1503. A century later, about 150 British travelers were blown off course by a hurricane and shipwrecked (1609–10) at Bermuda, which they named the Somers Isles. News of these events inspired Shakespeare's writing of The Tempest (Tempest, The) (1611–12); in the play Ariel makes reference to “the still-vex'd Bermoothes.” Bermuda was included (1612) in the third charter of the Virginia Company, and 60 English settlers were sent to colonize the islands. Indian and African slaves were transported to Bermuda by 1617, and soon the slave population outnumbered the white settlers.

In 1684 the colony became administered by the crown. The colonial capital was transferred from St. George to Hamilton on Main Island in 1815. Slavery was abolished in Bermuda and the rest of the British Empire in 1834.

During the American Civil War, Bermuda was a staging area for blockade runners to Southern ports. Rum was smuggled into the United States from the island during the Prohibition period (1919–33). In the 20th century the colony developed thriving industries in tourism and international finance. The U.S. government acquired a 99-year lease for military bases in 1941 but closed them in 1995. The British army garrison, which dated to 1797, was withdrawn in 1957, a Canadian base closed in 1993, and a small remaining Royal Navy base ceased operating in 1995.

The first Bermudian political party, the Progressive Labour Party, organized in 1963, claimed to represent the nonwhite citizens. In 1968 a new constitution gave strong powers to the elected head of the majority political party in the legislature, and the next election placed the multiracial United Bermuda Party in power with a substantial majority; the party was returned to power in subsequent elections.

Political tensions increased in 1973 when the governor, Sir Richard Sharples, was assassinated. Political unrest and rioting in 1977 led to official efforts to end de facto racial discrimination and to begin independence talks. In a referendum held in August 1995, however, nearly three-fourths of those voting opposed independence. In the 1990s economic and environmental concerns—the latter resulting in part from the high population density—and a growing traffic in illegal drugs were major political issues. Area 21 square miles (54 square km). Pop. (1970) 52,976; (1991) 59,324; (1995 est.) 58,000.