Only about 20 of the islands are inhabited. About 50 percent of the population is black. There is also a large British and smaller Portuguese population. The official language is English, but some Portuguese is also spoken. Despite both a cost of living and a population density that are among the world's highest, Bermuda has almost no poverty or unemployment. No income tax is levied, nor does the government receive any foreign aid. More than 98 percent of the population is literate, and education is free and compulsory between the ages of 5 and 16. There is one college.

The capital and chief port is Hamilton, on Great Bermuda. Hamilton is one of the world's smallest capital cities, with an area of about 180 acres (70 hectares). On St. George's Island, at the east end of the group, is the picturesque old port of St. George.

The average temperature is about 70° F (21° C). In winter it is seldom cooler than 55° F (13° C); in summer, rarely hotter than 87° F (31° C). The heavy rainfall of nearly 60 inches (152 centimeters) a year and brilliant sunshine encourage vegetation.

Palm, casuarina, and swamp mangrove are among the common trees. Hibiscus, oleander, poinsettia, and many other flowering plants and trees bloom lavishly. Acres of Easter lilies are cultivated for export and for making perfumes. About 200 species of birds have been noted, but most of these are migratory birds blown off their regular routes. The waters teem with fishes. Many are remarkable for their striking colors and markings.

Bermuda is believed to rest on the peaks of a volcanic mountain rising steeply from the ocean bottom to about 200 feet (60 meters) below the surface. Above this level the islands consist mainly of limestone formed by seashells and corals. Along the shore rise huge rocks, sculptured by wind and water into fantastic pinnacles, pillars, and grottoes. The reefs surrounding the islands are built up by corals—the northernmost point on Earth at which this type of growth occurs.

Coral stone gives Bermuda excellent road and building material. The white, smooth roads are simply the stone laid bare by stripping away surface soil or small hills. The stone is so soft that it is cut with handsaws, but it hardens with exposure to air. Even the roofs of the houses are built of stone, for they are used to catch rainwater, the chief water supply.

In a typical year at least 500,000 tourists, largely from the United States and Canada, visit the main islands. The money they spend gives the colony about 20 percent of its total income. International insurance and investment companies also contribute significantly to the economy through their foreign exchange earnings. Vegetables are exported for winter sale, but housing and industrial construction has reduced farm acreage. Pharmaceuticals and extracted scents for perfumes are major exports. Industry is confined to boat building, ship repairing, and furniture making. There is a little commercial fishing. Meat, flour, and most other foods are imported.

Early in World War II Bermuda became important as an outpost commanding Atlantic sea-lanes. In 1940 United States President Franklin D. Roosevelt gave Great Britain 50 overage destroyers in exchange for advanced bases. The United States maintained several military bases on the islands from 1941 to 1995. The lease of the bases was officially terminated in 2002.

One of the special charms of Bermuda before World War II was the absence of motor traffic. Automobiles were banned, and everyone traveled by bicycle, horse-drawn carriage, or boat, or on the motor-powered railway. In 1946 the ban on private cars, buses, taxicabs, and motorcycles was lifted, though cars are restricted to one per family, and car rentals are not allowed.

Bermuda sometimes finds itself in the path of a hurricane. Two of the worst in recent decades were Emily in September 1987 and Fabian in September 2003.

Bermuda is named for the Spaniard Juan de Bermúdez, who is credited with discovering the islands in about 1515. They were once called the Somers Islands, after Sir George Somers, who first settled them early in the 17th century.

Since 1684 Bermuda has been a British crown colony. Movements for independence have surfaced repeatedly over the years, but in 1968 Bermudans ratified a new constitution, under which the British monarch, represented by a governor, is the head of state. The governor controls defense, internal security, external affairs, and the police. The cabinet, headed by the premier, and including at least six other members of the majority party in the legislature, advises the governor on other matters. The 11 members of the Senate are appointed. The 40 members of the House of Assembly are elected, two from each of the islands' constituencies. Racial and political tensions increased in 1973 when Bermuda's governor, Richard Sharples, was assassinated. Rioting in the late 1970s led to the Human Rights Act of 1981 that prohibits racial discrimination. In 1995 the people of Bermuda soundly defeated a referendum on independence. Population (2002), 63,600.