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Its multi-ethnic, multi-religious society encompasses a majority Muslim population in most of its states and an economically-powerful Chinese community.
Consisting of two regions separated by some 640 miles of the South China Sea, Malaysia is a federation of 13 states and three federal territories.
It is one of the region's key tourist destinations, offering excellent beaches and brilliant scenery. Dense rainforests in the eastern states of Sarawak and Sabah, on the island of Borneo, are a refuge for wildlife and tribal traditions.
Ethnic Malays comprise some 60% of the population. Chinese constitute around 26%; Indians and indigenous peoples make up the rest. The communities coexist in relative harmony, although there is little racial interaction. 
Although since 1971 Malays have benefited from positive discrimination in business, education and the civil service, ethnic Chinese continue to hold economic power and are the wealthiest community. The Malays remain the dominant group in politics while the Indians are among the poorest.
Malaysia's economic prospects remain healthy, although it faces fierce competition from its neighbours, and from China and India.
Free trade talks were opened with the US, but the US has said it will not be able to conclude a deal in 2007 as the two sides failed to meet a deadline to secure a deal before President George W Bush's fast-track trade authority expired in June.
The country is among the world's biggest producers of computer disk drives, palm oil, rubber and timber. It has a state-owned car maker, Proton, and tourism has considerable room for expansion.
But it also faces serious challenges - politically, in the form of sustaining stability in the face of religious differences and the ethnic wealth gap, and, environmentally, in preserving its valuable forests.
Malaysia's human rights record has come in for international criticism. Internal security laws allow suspects to be detained without charge or trial.
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