Fourteen teams participated in the 1980–81 Cypriot First Division.
The team with the most points at the end of the season crowned champions.
The last two teams were relegated to the 1981–82 Cypriot Second Division.
APOP Paphos and Evagoras Paphos were relegated from previous season and played in the 1980–81 Cypriot Second Division.
They were replaced by the first team of the 1979–80 Cypriot Second Division, Nea Salamina.