The church of St George Exorinos in Famagusta on the east coast was packed with crowds of worshippers for the historic mass.
Those who could not find place inside the 14th century Greek Orthodox church filled the gardens and listened to the service through a loudspeaker.
Foreign dignitaries, including the US ambassador and a UN representative, also attended the mass.
One volunteer who helped to organise the service estimated that about 3,000-4,000 worshippers were present for Good Friday mass.
Throughout the evening a steady stream of Greek Cypriots filed into the church to hear the liturgy.
Famagusta?s mayor-in-exile Alexis Galanos, who joined forces with Turkish Cypriot mayor Oktay Kayalp to organise the service, said the service will send a message of reconciliation.
Cyprus has been divided since 1974, when Turkey seized its northern third in response to an Athens-engineered coup in Nicosia aimed at uniting the island with Greece.
Because of intercommunal troubles before the island gained independence from Britain in 1960, religious services at St George Exorinos stopped 58 years ago.
Bishop Vassilis, Metropolitan of Constantia,officiated and was joined by Turkish Cypriot officials and religious figures, as well as by several Greek Cypriot politicians.
Pavlos Iacovou, head of the civil society group "Famagusta, Our City", who also helped organise the historic event, said it "showed the people that Greek Cypriots and Turkish Cypriots can live together",
"We?re working for peace," Iacovou said, adding that it was "like a miracle" that the two sides were together on such an important day of the Easter calendar.
Relaunching peace talks on February 11 after a nearly two-year hiatus, Greek and Turkish Cypriot leaders vowed to seek an end to the four-decade division of Cyprus "as soon as possible".
The two leaders met for a second time earlier this month to "scan over" the positions of each side before entering a more detailed phase.
Because of an improved climate of trust, the same church has also hosted Orthodox morning mass twice since last December.
Before the invasion, the mediaeval city of Famagusta was the island?s premier port and tourist destination, famed for hosting such Hollywood stars as Elizabeth Taylor and Richard Burton.