Some 164,000 people are voting for a new president in what is set to be a race between incumbent Mehmet Ali Talat and Derviş Eroğlu, his key challenger. Opinion polls put Eroğlu, a staunch supporter of Turkish Cypriot independence, in the lead. The winner will need more than 50 percent of votes cast, or it will go to a runoff next week.
Voting started at 0500 GMT and was scheduled to end at 1500 GMT. Conclusive results were expected by about 1800 GMT.
The winner will have to negotiate a settlement on the divided island with rival Greek Cypriots living in the south. Without a deal, the Greek Cypriots will block Ankara's bid to join the bloc.
"A lot of people see it's (a deal) within reach, and if you can't do it now it's very hard to see when the next opportunity will come along," a diplomat close to the peace process told Reuters.
Eroğlu, prime minister of a breakaway state in northern Cyprus recognised only by Ankara, supports more independence for each community in any peace settlement, a view the Greek Cypriot side sees as unacceptable.
"I believe a person should be elected who could continue talks where they broke off," said Greek Cypriot leader Demetris Christofias, engaged in peace talks with Talat for the past 18 months. "Not someone who wants us to start from zero, with distorted two-state views."
Talat has said peace talks with Christofias to re-link the island as a loose federation are promising.
Diplomats worry over a setback to negotiations if Eroğlu wins. He has said he would continue reunification talks, though his tougher demands for Turkish Cypriot independence will at the very least slow down reunification talks, say diplomats.
The outcome of the vote in northern Cyprus has major implications for Turkey whose own negotiations to join the European Union are virtually hostage to the resolution of the decades old island dispute.
Cyprus was ethnically split in a Turkish intervention in 1974 triggered by a brief coup inspired by the military then ruling Greece.
The conflict not only burdens Turkey's bid to join the EU, but also makes decision making on defence issues between NATO, of which Turkey is a member, and the EU problematic.
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