Fourteen teams participated in the 1985–86 Cypriot First Division.
The team with the most points at the end of the season crowned champions.
No team was relegated to the 1986–87 Cypriot Second Division.
Omonia Aradippou and Evagoras Paphos were relegated from previous season and played in the 1985–86 Cypriot Second Division.
They were replaced by the first two teams of the 1984–85 Cypriot Second Division, Ermis Aradippou and APOP Paphos.