Fifteen teams participated in the 1988–89 Cypriot First Division.
The team with the most points at the end of the season crowned champions.
The last three teams were relegated to the 1989–90 Cypriot Second Division.
APEP, Alki and Anagennisi were relegated from previous season and played in the 1988–89 Cypriot Second Division.
They were replaced by the first two teams of the 1987–88 Cypriot Second Division, Keravnos and Omonia Aradippou.