Guy of Lusignano introduced the feudal system, granting property to the barons who had accompanied him from Palestine. Constitutional and legal issues were dealt with by the Jerusalem Assize, a code adopted by the former kingdom, but local laws and customs were maintained.

Two years later, in 1194, Guy died and was succeeded by his brother Amaury. To ratify his right to rule, Amaury obtained a crown from the Holy Roman Emperor, Henry VI, and in 1197 he became the first Lusignano king of Cyprus. To ensure its position from outside and inside Amaury extended the mountain castles of Saint Hilarion, Buffavento and Kantara. He also took steps to move the Orthodox Church by introducing Roman communion.

The oppression of the Orthodox Church was completed by decrees issued in the Council of Famagusta in 1222. Orthodox visits were reduced and the four remaining bishops stopped in the country towns. The Orthodox entrances were assigned to the Latin Church and, in general, the Orthodox Church was placed in a Latin straitjacket.

The rivalries between the merchant powers broke out at the coronation of Peter II as king of Jerusalem and Cyprus in Famagusta in 1372. A dispute between the representatives of Genoa and Venice over who was to ride the king's horse provoked a fight, and hostilities continued afterwards the celebrations, when the Venetians, with tacit Cypriot support, attacked the Genoeses, killing several and destroying their properties.

The Genoeses responded with an iron fist. The troops were dispatched, Famagusta and Nicosia were kidnapped together with the young king, James, the policeman of Cyprus, and Eleanor, the king's mother, retired to the Kyrenia castle which resisted all the Genoese assaults. A treaty in 1374 restored Peter to the throne, but Famagusta was held by the Genoese and James was held hostage in Genoa until he managed to triumph in 1385.

The raids on Egypt of Janus (1398-1432) aroused the wrath of the Mamelukes, who descended on Cyprus in 1426 and destroyed a weakened Cypriot army, plundered Nicosia and imposed tributes on the island.

The Lusignano dynasty never recovered. Intrigue within the royal family weakened his position. The illegitimate usurper James II managed to snatch Famagusta from the declining Genoeses. However, the marriage to Caterina Cornaro of Venice was a fatal mistake. The Venetians, who had long craved the island, soon planned the king's death and effectively ruled Cyprus until they officially took over in 1489, when Catherine was persuaded to give up her position in their favour.