The colony's economic mainstays are international financial services, especially insurance and reinsurance, and tourism. Fine beaches, an excellent climate, and picturesque sites have made Bermuda a fashionable and popular year-round resort. Semitropical produce, sales of fuel to aircraft and ships, and the reexport of pharmaceuticals also contribute to the economy. Most capital equipment and food is imported. Bermuda is divided into nine parishes and two municipalities. The British monarch, represented by a governor, is titular head of state. Bermuda is led by a premier and has a bicameral parliament with an appointed 11-member Senate and an elected 36-member House of Assembly.

About 55% of Bermuda's inhabitants are of African ancestry, descended from slaves brought to the islands during the 18th cent.; there is also a sizable population of British descent. English is spoken. The main religions are the Anglican, Roman Catholic, African Methodist Episcopal, and other Christian churches.

Reputedly the first person to set foot on the islands was the Spanish navigator Juan de Bermúdez (1503–11), but they remained uninhabited, despite visits by the Spanish and English, until Sir George Somers and a group of colonists on their way to Virginia were shipwrecked there in 1609. This incident was known to Shakespeare when he wrote The Tempest. Long called Somers Islands, the Bermudas were first governed by chartered companies but were acquired by the crown in 1684. The harbor of St. George was a base for privateers during the War of 1812, and the island was a center for Confederate blockade runners during the American Civil War.

During World War II the islands played an important strategic role as the site of a U.S. naval and air force base. Internal self-government was granted in 1968, and the United Bermuda party (UBP) was in power for the next 30 years. Sir John Swan was premier from 1982 to 1995, when he resigned after voters rejected independence (which he had supported); David Saul succeeded him. Saul resigned in 1997 and was succeeded by Pamela Gordon, the first woman premier. In 1998 the Progressive Labor party (PLP) came to power, with Jennifer Smith as premier. Although Smith led her party to victory again in 2003, a PLP revolt led to her resignation and Alex Scott became premier. Scott's strong support for independence, which was not popular, led Ewart Brown to challenge him for the PLP leadership post, and in 2006 Brown replaced Scott as party leader and premier. Brown and the PLP remained in power after the 2007 elections.