Paralimni is the largest town in the free Famagusta district and is situated in the southeast of Cyprus. The word Paralimni means "settlement by the lake". Historically, Paralimni was built on the shores of a shallow lake, which filled with water only in the wintertime.

In the beginning of the 20th century, as a result of reclamation work, the whole of the lakebed was reclaimed for agricultural purposes. Paralimni has not always been where it is now. Originally it was built on a hill, which was situated between Dherinia and its present location.

However, in the 15th century, it was moved inland to avoid detection by the sea pirates. It is said that the first people to settle at Paralimni arrived just after the capture of the near town of Famagusta by the Ottoman Turks in 1571. The first settlement was called Saint Demetrius and this place still bears his name today.

Not far from Paralimni, at a location known today as Protaras, stood the old city-state of Leukolla. The city possessed a small safe harbour where the Athenian Demetrius Poliorketes in the year 306 B.C. sought refuge, lying in wait for Ptolemeos, one of the successors of Alexander the Great. In the ensuing battle Ptolemeos was defeated and fled to Egypt, leaving Cyprus for a while in the hands of Demetrius. The first inhabitants of Paralimni were farmers. The location of Paralimni is favoured by a very mild climate which is conducive to the early-in-the year produce of vegetables and potatoes. Paralimni has lovely beaches and the most well known in the area is Fig Tree Bay in Protaras area.

Protaras is part of Paralimni which is more familiarly referred to as "the land of windmills" maintaining the nostalgic quality of the past. Picturesque but geared for tourism, Protaras has lovely sandy white beaches, and many restaurants, pubs and clubs.

In 1986, after a referendum, Paralimni was declared a municipality with the name "Paralimni". In May 1986 the first elections were held for the office of mayor and municipal council. Nikos Vlittis was elected the first mayor. Today Paralimni is a rich little town which is developing rapidly in all sectors of economic, social and cultural life. The adjacent streets, the new squares and the park all carry the characteristics of a modern town with its beautiful showrooms and modern shops. In the streets one may encounter old men and women in local costume, young men and women dressed in the latest fashions, and tourists mingling with them in casual dress. There is an air of contentment and social harmony.