It will provide President Vladimir Putin with an opportunity to emphasise Russia's role in international affairs. But some critics have said Russia is not a fit country to head the group, which brings together the world's leading industrialised democracies.
Global energy supply is set to be a big issue, with Russia seeking to show the importance of its oil and gas reserves. Mr Putin will want to emphasise to G8 members like the US, Japan and Germany, that their economies may be far bigger than Russia's, but they need his country because it has enough oil and gas to keep them supplied for years to come.
Mr Putin has made restoring Russian prestige central to his presidency. Many Russians still feel keenly their nation's loss of influence following the collapse of the Soviet Union. Now Mr Putin will be able to say Russia is back, and with a real say at the top table.
Mr Putin will also press for co-operation against terrorism. And where Tony Blair put African development at the heart of Britain's chairmanship of the G8, Mr Putin will say that poverty in former Soviet states should be given an equal priority. But Russia's chairmanship will face criticism too. Some US Senators have argued that Russia should not be a member of what is a club of developed democracies, let alone be allowed to head the organisation.
Russia was originally admitted as an observer to encourage it to reform its economy and develop democratically. But Russia is still not one of the world's leading economic powers. And Mr Putin has been criticised for prosecuting political opponents, clamping down on the media, and tolerating human rights abuses by his military in Chechnya.
He has supported repressive regimes like that in Uzbekistan, and continues to help Iran develop nuclear power. So Russia's time at the head of the G8 will raise Russian prestige, but raise uncomfortable questions too.
Austria sees constitution on hold
The Austrian president, whose country has taken over the presidency of the EU, has said he expects no major moves towards an EU constitution this year. Heinz Fischer, whose role is largely ceremonial, told the BBC's The World This Weekend programme that 2006 was likely to be a period of reflection. Moves towards an EU constitution floundered last year after "No" votes in France and the Netherlands. Austria takes over the six-month EU presidency from the UK.
President Fischer told the BBC he supported the idea of an EU constitution, but that it would not happen this year. However he said he expected intense discussions on the issue. As Austria began its EU stint, Chancellor Wolfgang Schuessel was hosting his German counterpart for talks in Vienna. She has said she is keen to renew the debate over the constitution. Mr Schuessel has called for a new mood of confidence in the EU, but said recently: "We won't create a new Europe in the next six months."
Correspondents say rebuilding popular support for the EU will be one of Mr Schuessel's key challenges, with recent opinion polls suggesting Austria is among the most Eurosceptic nations. As Mr Schuessel faces parliamentary elections later this year he will be under pressure not to be too eager to push forward European integration, reports the BBC's European affairs correspondent William Horsley.
Several decisions are due in the next six months, which could blow up into serious disputes, given the rival positions of various European leaders, our correspondent adds.
They include detailed preparations for Turkey's application to join the EU, winning the European parliament's approval for the EU's long-term budget, and enacting a new version of the controversial services directive, which is designed to lift barriers to internal EU trade.
The services directive is one of the liberalising measures being pushed by Britain and others but it is fiercely opposed by another group including France. Under Austria's leadership, the EU is also set to decide whether Romania and Bulgaria are ready to join the EU in 2007, or whether they must wait another year.