Geographically, the territory is largely on the Canadian Shield and almost entirely north of the tree line (except near the Manitoba border); the landscape is dominated by tundra, rock, and snow and ice. The capital and largest town is Iqaluit on Baffin Island at Frobisher Bay. The territory is effectively controlled by the Inuit, who make up 85% of the population and speak Inuktitut as their first language, although control could change with population growth.

Most of the richest and most well-developed parts of the Northwest Territories, which lie along the Mackenzie River, were not included in Nunavut, which must rely on the development of its mineral resources, such as diamonds (which are now being mined), in addition to hunting, fishing, fur trapping, sealing, and the production of arts and crafts. The Inuit hold outright title to about 20% of Nunavut, including 13,896 sq mi (36,000 sq km) of subsurface mineral rights. The territory faces problems including high unemployment, substance abuse, and suicide rates, and some 90% of its budget currently comes from the Canadian government. There are no paved roads, and long-distance travel is largely by air. There is a small tourist trade, lured by the wildlife and vast, spare wilderness, as well as Inuit cultural attractions.

The separation of Nunavut from the Northwest Territories began with a 1992 territorial referendum in which the electorate approved the move as part of the largest native land-claim settlement in Canadian history. The process concluded with the establishment of the new territory on Apr. 1, 1999. Nunavut has an elected 19-member assembly, which will assume all governing powers by 2009. Members of the assembly are elected on a nonpartisan basis. Paul Okalik, an Inuit, was elected by the assembly as Nunavut's first premier; he was reelected in 2004, but lost to Eva Aariak in 2008. The territory sends one senator and one representative to the national parliament.