More than a quarter of a billion Europeans regularly use the internet, with around 80 percent of those people hooked up to broadband connections.
Around three-quarters (77 percent) of businesses in Europe are now using high-speed broadband, according to the European Commission's latest i2010 progress report. This compares to 62 percent in 2005.
i2010 is the EU's digital-led strategy to boost growth and jobs, established in 2005.
In addition, around 60 percent of public services are now fully available online, while two-thirds of schools make use of fast internet connections.
The report suggests that the significant proportion of Europeans now online is largely down to the strong growth of broadband across the region.
According to the Commission there are now around 100 million broadband internet connections across the EU, with 40 million new, regular users going online during 2007.
The EU commissioner for information society and media, Viviane Reding, said the fact that all 27 EU states are promoting IT is helping Europe to compete internationally, while also modernising everyday life for European citizens.
Reding warned, however, that some parts of the EU are lagging behind, so all member states must work to close these gaps in broadband coverage to reach more remote regions.
Other challenges include boosting technology research through EU-funded projects, further encouraging the use of online technologies and promoting more cross-border co-operation, such as the use of electronic signatures.