The island is well watered, fertile, and reputed to have the most attractive countryside of the Greek islands. Olive trees predominate, but figs, oranges, lemons, grapes, and corn (maize) are also cultivated. Exports include olive oil, fruit, grain, and wine; Corfu's manufactures include soap and textiles.

Modern Kérkira, the chief city, port, and capital of the nomós, lies on a peninsula on the east coast. The twin-peaked old citadel, with fortifications built by the Venetians (1550), was once an islet. Its old town, with its labyrinth of hilly, narrow streets, is a seat of a Greek metropolitan and a Roman Catholic bishop.

The name Corfu is an Italian corruption of the Greek coryphai (“crests”). According to legend, the island was Scheria, home of the Phaeacians in Homeric epic. A Corinthian (Corinth) colony established about 734 BC supplanted a settlement of Eretrians from Euboea. Proudly independent and even hostile to its mother city of Corinth, the new colony was reduced (c. 600 BC) by the Corinthian tyrant Periander, but later it regained independence and devoted itself to commerce. Corfu took no active part in the Persian invasion (480 BC) of Greece, but in 435 it sought the assistance of Athens in a quarrel with Corinth, a request that became a primary cause of the Peloponnesian War. Corfu quit the war in 410, but a new alliance with Athens (375) resulted in hostilities with Sparta.

After 303, the island changed hands several times for a quarter century. Seized in 229 BC by the Illyrians, it was delivered by the Romans, who retained it as a naval station and made it a free state. In 31 BC Octavian (later the emperor Augustus) used it as a base against Mark Antony, but his foundation of Nicopolis Actia on the site of his victory caused Corfu to lose a great deal of its prestige.

The island's favourable position between Greece and Italy attracted powers from east and west. In succession it fell to Goths, Lombards, Saracens, and Normans and was fought over by the kings of Sicily and the Italian city-states of Genoa and Venice. In 1204 the island was annexed to the Greek despotate of Epirus but passed back to King Manfred of Sicily (1259) and then (1267) to the Angevins of Naples. Venetian sovereignty was restored in 1401. Upon the dismemberment of the Venetian republic (1797), Corfu was assigned to France; but the French garrison soon was expelled by a Russo-Turkish fleet. Incorporated into the Napoleonic empire (1807), it became a British (British Empire) protectorate after the emperor's final defeat (1815). British administration displeased the inhabitants, however, and in 1864 Corfu was ceded, with the other Ionian Islands, to Greece.

In 1923 Italian forces bombarded and held Kérkira briefly, following the murder of an Italian boundary delegation. In World War II, the city was again bombed by the Italians and occupied in succession (1941–44) by Italians and Germans. Many of its buildings and other landmarks were destroyed in the fighting of 1943; but the Royal Palace (1816), a former residence of British governors and now a museum, escaped. The island was restored to Greece in 1944. The island escaped the great earthquake of 1953, which destroyed large parts of the southern Ionian Islands, and became very popular with tourists. In 1962 a palace built (1890–91) for Elizabeth, empress of Austria, was converted to use as a casino. Pop. (1981) city, 36,901; island, 97,102; nomós, 99,477.