Kosovo's parliament voted for independence from Serbia on 17 February 2008, and put a new constitution into place four months later.
The move remains controversial, but Kosovo received a significant boost to its case on 22 July 2010 when the International Court of Justice (ICJ) ruled that its declaration of independence was not illegal under international law.
What is Kosovo's current legal status?
Kosovo's parliament pressed ahead with the rapid adoption of packages of law setting out the framework of independence. A new constitution was adopted in April 2008, and came into force two months later, transferring power to the majority ethnic-Albanian government after nine years of UN rule.
Kosovo has established its own army and intelligence agency, issued passports and set up its first embassies. A national anthem has also been adopted.
It has also become a member of the World Bank and the International Monetary Fund.
Seventy countries have recognised its independence so far, including the US, Turkey, and 22 of the EU's 27 nations, including the UK, Germany, France and Italy.
But Serbia and Kosovo's minority Serbs are vehemently against it - and they have the support of Russia and China. Soon after the independence declaration, Serbia's Prime Minister at the time, Vojislav Kostunica, damned Kosovo as a "false state".
Russia and China have both opposed a new UN Security Council resolution to settle Kosovo's status.
Serbia requested a ruling from the ICJ, the UN's main judicial organ, which found that Kosovo's declaration of independence did not violate "general international law".
The ruling is not binding, but is seen as politically important since it may encourage more countries to recognise Kosovo.
The ICJ judges said their ruling was restricted to the secession declaration itself and did not address the wider issue of Kosovo independence.
Are there still international forces in Kosovo?
The European Union has a mission of some 1,900 law enforcement officials deployed across Kosovo to strengthen law and order.
It deployed at the end of 2008 under a plan drawn up by UN special envoy Martti Ahtisaari for "supervised independence", after delays linked to Russian objections over the withdrawal of the UN force it replaced.
The force, known as Eulex, consists of police officers, judges, prosecutors and customs officials.
Meanwhile, the 10,000-strong, Nato-led K-For mission has remained responsible for Kosovo's security.
It also has also been training a new 2,500-member multi-ethnic internal security force, the Kosovo Security Force (KSF), which was launched in January 2009.
Why are some countries opposed to an independent Kosovo?
Russia is a traditional ally of Serbia - considering it to share a Slavic and Orthodox Christian tradition - and opposed Nato intervention in Kosovo in 1999.
It has played on fears that Kosovo could open a "Pandora's box" of independence claims, saying there is little difference between the separatism of Kosovo and the ambitions of pro-Russian areas such as Abkhazia and South Ossetia in Georgia and Trans-Dniester in Moldova.
Russia is also concerned by the EU's expansion into the Balkans. Brussels recently offered Belgrade an interim agreement on the path towards EU membership.
Other countries oppose Kosovo's independence because of their own fears about secessionist challenges and the aspirations of minority groups.
These include China and five states within the EU: Cyprus, Romania, Slovakia, Spain and Greece.
How has Serbia reacted?
Serbia's main political parties are unanimous in their rejection of Kosovo as an independent state, but the declaration of independence ultimately led to the collapse of Vojislav Kostunica's government, as the main coalition partners split over the EU's plans to deploy in Kosovo.
Elections in May 2008 were won by President Boris Tadic's pro-EU alliance.
After weeks of negotiations, the bloc formed a coalition government with its former rivals, the Socialists.
Prime Minister Mirko Cvetkovic promised to take Serbia into the EU, but said Belgrade would never recognise Kosovo's independence.
What will happen to Kosovo's Serb minority?
Kosovo's 2m population includes an estimated 120,000 ethnic Serbs, many of whom live in Serb-dominated areas north of the Ibar river, adjoining Serbia proper. Half of the population lives under Nato protection in scattered enclaves south of the Ibar river.
Under the UN plan, the Serb minority is meant to have guaranteed places in local government and parliament, proportionate representation in the police and civil service, and a special status for the Serbian Orthodox Church.
However, Serb hardliners vowed not to co-operate. Some 150 Kosovo Serb police officers in the south-east were suspended when they refused to take orders from the capital, Pristina.
A degree of partition is already a fact of life in the Serb-dominated areas, and in June 2008 Kosovo Serbs set up their own rival assembly in Mitrovica.
Although it has no real powers, it is seen as a challenge to the ethnic Albanian government in Pristina and a way of strengthening parallel Serb institutions and links with Serb authorities in Belgrade.
Kosovo's President Fatmir Sejdiu described it as "an attempt to destabilise Kosovo", and a UN spokesman called the assembly a "virtual reality".
Could tensions turn to violence?
Clashes have occasionally erupted in parts of northern Kosovo that are divided between ethnic Albanians and Serbs.
The main northern town of Mitrovica, where ethnic Serbs live north of the Ibar river and ethnic Albanians to the south, has been a flashpoint.
Crowds of Serbs reacted angrily to the independence declaration. They burned down two border posts in northern Kosovo and staged mass protest rallies. Nato reinforcements were sent to secure the border with Serbia.
A riot in March 2008 left one UN policeman dead. Ethnic clashes broke out in Mitrovica in August 2009, and in July 2010 one person was killed and 11 injured by an explosion at a rally in the Serb part of the city.
However, there have been few signs that discontent could turn into organised violence, or that ethnic populations might be forced to leave their homes.
Nato forces said they were ready for any violence triggered by the ICJ ruling.
The alliance was heavily criticised in 2004, when its troops failed to quell ethnic Albanian riots targeting Serbs.