These historic developments would have been extremely hard to imagine in not-so-distant Soviet times.
Estonia was part of the Russian empire until 1918 when it proclaimed its independence. Russia recognised it as an independent state under the 1920 Treaty of Tartu.
During the two decades that followed it tried to assert its identity as a nation squeezed between the rise of Nazism in Germany and the dominion of Stalin in the USSR.
After a pact between Hitler and Stalin, Soviet troops arrived in 1940 and Estonia was absorbed into the Soviet Union. Nazi forces pushed the Soviets out in 1941 but the Red Army returned in 1944 and remained for half a century.
The rapidly expanding Soviet planned economy brought hundreds of thousands of Soviet immigrants to Estonia, causing widespread fear among Estonians that their national identity would eventually vanish.
Russians account for up to a third of the population.
The legacy of the Soviet years has left a mark which the country carries with it into its EU era: Many Russian-speakers complain of discrimination, saying strict language laws make it hard to get jobs or citizenship without proficiency in Estonian. Some Russian-speakers who were born in Estonia are either unable or unwilling to become citizens because of the language requirements.
After a decade of negotiations, Estonia and Russia signed a treaty defining the border between the two countries in May 2005. The Estonian parliament ratified it soon afterwards but only after it had introduced reference to Soviet occupation. Moscow reacted by pulling out of the treaty and saying talks would have to start afresh.
The Estonian language is closely related to Finnish but not to the languages of either of the other Baltic republics, Latvia and Lithuania, or to Russian. The country has unique traditions in folk song and verse, traditions which have had to be strong to survive the many centuries of domination by foreign countries.
Estonia enjoyed an investment boom following EU accession, but in 2008 its economy was badly hit by the global financial crisis.
The government adopted tough austerity measures and won plaudits for getting the economy back into shape ahead of entry to the European single currency in January 2011.
President: Toomas Hendrik Ilves
Mr Ilves was first sworn in as president in October 2006.
As head of state, the president is supreme commander of the armed forces and represents Estonia abroad. However, the role is mainly ceremonial.
The president is elected to a five-year term by MPs and local officials. Mr Ilves was re-elected for a second five-year term in August 2011.
Prime minister: Andrus Ansip
The centre-right coalition led by Andrus Ansip increased its parliamentary majority in elections held in March 2011.
Mr Ansip thus bettered his own record of being Estonia's first sitting prime minister to be re-elected since the country quit the Soviet Union in 1991.
He became prime minister in April 2005 and in March 2007 his centre-right Reform Party won parliamentary polls, but with too small a margin to govern alone.
It went on to form a coalition with the conservative Pro Patria-Res Publica (IRL) and the Social Democrats.
The re-election of the coalition in March 2011 was seen as voters rewarding the government for piloting the country through the economic crisis caused by the credit crunch of 2008, and into recovery.
It was also Estonia's first election since joining the single European currency in January 2011.
Mr Ansip had originally aimed for eurozone membership in January 2007 but high inflation led the government to put back the target entry date.
Taking office for his third term, Mr Ansip said that improving the quality of people's lives was a top priority.
In the run-up to the March 2007 poll Mr Ansip backed legislation that paved the way for the removal of a controversial Red Army memorial in Tallinn. The law, and the subsequent relocation of the statue, sparked fury in Moscow.
Andrus Ansip was 48 when he became premier. He entered national politics in 2004 following six years as mayor of Tartu, Estonia's second city.
He is married and has three daughters.
Estonia's broadcasting industry has attracted foreign media groups; the main privately-owned TVs are run by Swedish and Norwegian concerns.
Eesti Televisioon (ETV) and Eesti Raadio (ER) are public broadcasters. Take-up of cable TV is extensive; the offering includes stations in Finnish, Swedish, Russian and Latvian. Estonia has completed the switch from analogue to digital TV broadcasting.
Estonia has a reputation for being at the cutting edge of technology. By March 2011, more than 971,000 Estonians - 76% of the population - were using the internet (Internetworldstats.com). The country held the world's first parliamentary "e-vote" in 2007.
Estonia ranked ninth out of 178 nations in the 2010 Reporters Without Borders press freedom index.