Today, events of unrecognised significance are altering the political environment surrounding Cyprus and its relationship with the European Union. First, the two new governments on Cyprus and the advancing process of accession negotiations between the EU and only one of these governments presents uncertainty and instability to the island, its neighbours and the EU. Second, significant change is unfolding in nearby Turkey where the recent political and fiscal initiatives have been termed revolutionary. This and the improved relations with Greece bring Turkey’s efforts for EU accession to a more concrete stage. Finally, the EU itself has begun a fundamental reshaping in form and character as it faces an almost doubling in size through enlargement toward the east. This paper addresses the inscrutable divisions on Cyprus and suggests that the traditional policies in place and enlargement processes in motion present a perilous crossroads for all the parties involved, leaving their leaders with critical choices. This paper recommends a new realism and rationalism in shaping those choices that lead toward constructive co-operation. The paper suggests that policies of the past be reconsidered and that new, forward-looking approaches, based on realistic assessments of the past, present and future, be adopted. Considering the history of Cyprus, reliance on the traditional international law positions of the UN, the EU and all the parties is no longer profitable for reconciliation of this dispute. This realism further emphasises the strategic and symbolic value of Cyprus to the EU and the region. As long as the present impasse over Cyprus dominates the legal and political discourse of the region, European Union enlargement will be distorted, and any form of accession for Cyprus in the near future becomes less likely. Moreover, rationalism suggests that predictable, undesirable consequences will result from a continuation of the present political impasse as the accession process continues, and that reasonable choices are available to the leaders of the countries and institutions involved. Thus, corrective measures should be taken to avert this impending political collision over Cyprus. This paper offers a theory of constructive collaboration based on a model of creativity and functionalism evolving from the successes of European integration itself. Abandoning the polar arguments of an ambiguous international law, the parties should recognise that there is a middle ground amid today’s nuanced concepts of intergovernmental and supranational co-operation. The primary political actors should accept enlargement as a strategic context for breaking the impasse and, supported by their neighbours and the EU, they should adopt a pragmatic programme of accession collaboration and erect a flexible structure and process for limited yet evolving co-operation. Such focused, formal collaboration between the EU and the two divided communities could offer a constructive path leading to the future accession of the island.