President Hosni Mubarak has resigned after nearly 30 years in power and 18 days of relentless pressure from street demonstrations demanding an end to his rule. Here is a guide to what is happening and why it matters for the rest of the world.
What prompted Mr Mubarak to step down?
Friday's announcement that Hosni Mubarak had handed control to the Supreme Military Council came as a surprise in one way, but in another way it was remarkable how long he had lasted. "Game over" was the message from the streets, and protesters were adamant that they would not go home until he left office.
But the government hung on, offering various concessions and deploying various tactics to intimidate the pro-democracy crowds, but they only became more numerous and more passionate.
It seemed as though the game was up on Thursday, when the army council met without a senior government figure in the chair.
But the president came back with one last throw of the dice - in a state address on TV reiterating his position.
This enraged the expectant multitude in Cairo's Tahrir Square and around the country, and their zeal perhaps was the final message that the game was finally over.
How did it all start?
Egypt has long been known as a centre of stability in a volatile region, but that masked malignant problems which erupted in popular demonstrations against the 30-year rule of Hosni Mubarak on 25 and 28 January. His National Democratic Party (NDP) monopolised political power through a mixture of constitutional manipulation, repression and rigged elections, cronyism, and the backing of powerful foreign allies.
The main drivers of the unrest have been poverty, rising prices, social exclusion, anger over corruption and personal enrichment among the political elite, and a demographic bulge of young people unable to find work.
The catalyst was fellow Arabs in Tunisia successfully overthrowing their autocratic ruler, Zine al-Abidine Ben Ali, with a popular uprising on 14 January.
Popular anger was fuelled by dozens of deaths at the hands of the security forces, while protesters' voices have been heard thanks to social media and the presence of independent news broadcasters at the scene.
Their rallying cries were "The people want the fall of the regime", "Mubarak, go", and "Illegitimate, illegitimate".
Why does it matter?
Egypt is by far the most populous Arab country and what happens there carries great political weight around the world, especially the Middle East. Cairo's relationship with Washington is underpinned by a peace treaty with Israel, agreed in the late-1970s after four Arab-Israeli wars in which Egypt was standard-bearer of the Arab cause.
Hosni Mubarak's autocracy, and billions of dollars of US military aid, permitted him a free hand to engage with Israeli governments, unhindered by deep public concern about Israel's military and political handling of the Palestinians and Lebanon.
The realities of democratic politics could bring about a recasting of those relationships; hence the apprehensiveness of Israelis and Americans as they follow events.
There are also major economic implications, as Egyptian industry and the valuable tourism sector have been paralysed by the political unrest. Oil prices have risen amid fears of unrest affecting traffic through the Suez Canal and, in the long term, of a wider regional crisis.
Who are the anti-government protesters?
The protests have included people from all sectors of society, but at the forefront have been young, tech-savvy Egyptians who have never known another ruler of their country.There is no single figurehead or unified leadership, although a number of opposition political figures and groupings are taking part.
They include the UN former nuclear agency chief Mohamed ElBaradei and Ayman Nour, a lawyer and leader of the Ghad party, who was jailed after contesting the 2005 presidential election.
The Muslim Brotherhood, officially banned but still Egypt's only large-scale organised opposition movement, has also joined the protests.
Although the Muslim Brotherhood is signed up to democratic reform and has renounced violence, fears of a swift post-Mubarak lurch towards Islamist rule is the main worry for Western powers and Israel.
A "Council of Wise Men" has been formed, including prominent businessmen, lawyers and academics, who see dialogue with the government as the way out of the crisis.
What was the government's initial response?
Hosni Mubarak made concession after concession hoping to appease public and international opinion, but his refusal to step down immediately made the protests more vociferous. His main gambit was to appoint a new vice-president, in the shape of Omar Suleiman, the shadowy head of Egypt's intelligence service, and to cede some powers to him.
He has also confirmed he would not stand for re-election, and nor would his son Gamal, who for years was apparently being lined up as a successor to his father.
Although talks took place between Mr Suleiman and opposition groups, including the Muslim Brotherhood despite its official ban, they quickly hit an impasse.
The government insisted that the street protests should end immediately and life return to normal, while the protesters believed that pressure must be kept up to ensure any reforms are not purely cosmetic.
As the protests entered their third week, the authorities changed tone somewhat, describing protesters as honourable people with honourable aspirations, rather than wayward youths.
The government's moves were dismissed by most opponents as a ploy to hang onto exclusive power.
Protesters were especially unhappy about the prospects of a President Suleiman. Not only is he linked to the alleged detention and torture of government opponents, but he is also Egypt's main go-between with Israel.
Both president and his deputy have been branded by protesters as "agents", acting in US and Israeli interests rather than those of Egyptians.
It is too early to tell whether they will accept Defence Minister Mohamed Hussein Tantawi as interim de-facto leader, or if Mr Suleiman will have a role in the new set-up.
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