We present a new geodetic velocity solution for Italy and the surrounding areas, obtained from an analysis of continuous and survey-mode Global Positioning System observations collected between 1991 and 2002. We have combined local, regional and global networks into a common reference frame velocity solution, providing a new detailed picture of the regional-scale deformation field in the central Mediterranean. Our velocity estimates are computed with respect to a new stable Eurasian reference frame, constraining the kinematics of the greater African—Eurasian plate boundary system in the study area. We provide strain-rate values for the main seismotectonic districts, which are in good agreement with the seismic deformation inferred from earthquake focal mechanisms. The southern Tyrrhenian area, Calabria, the Apennines, the southeastern Alps, the southern Dinarides and the Albanides display deformation rates at the order of 20–30 nanostrain yr⁻¹. The Corsica—Sardinia block moves according to Eurasian Plate motions, and there is no indication that the opening of the Tyrrhenian is still active. The Pelagian and Sicilian domains are separated by a northwest—southeast discontinuity, the Sicily Channel rifted area, and marginally significant relative motion between the Pelagian Plateau and the African Plate is also observed. The southern Tyrrhenian is affected by north—south compression and accommodates up to 50 per cent of the Africa—Eurasia relative plate motion, whereas the Calabrian Arc exhibits ∼2 mm yr⁻¹ northwest—southeast extension. The observed deformation pattern suggests the presence of a major approximately north—south tectonic discontinuity separating the Sicilian and Calabrian domains. An extensional boundary observed along peninsular Italy coincides with the distribution of seismogenic faults along the axis of the Apennines. This boundary separates a Tyrrhenian and an Adriatic domain with diverging velocities, orientated north—NNW-ward and northeastward, respectively. The Apennines are extending perpendicularly to the chain axis at rates of less than 3 mm yr⁻¹, and only in the outer northern Apennines indications of active shortening are observed. Insignificant deformation is observed in the western Po Plain and the western Alps, while the central and eastern Alps display north—south shortening. The eastern Adriatic domain is shortening perpendicular to the Dinaric front with strain rates increasing from north to south. The locus of collision between the Aegean/Balkan system and the Adriatic and Ionian domains is marked by the Kephalonia fault system, which accommodates up to 20±1 mm yr⁻¹ of right-lateral motion. The deformation pattern observed in the peri-Adriatic domain is well described by a counter-clockwise rotation of the Adriatic microplate around a pole located in the western Alps.