Thousands of Russian troops have taken control of the Black Sea peninsula, and Crimea's pro-Russian leaders have worked hard to ensure that the vote is tilted in Moscow's favour.
That, along with an ethnic Russian majority, is expected to result in a comfortable "yes" vote to leave Ukraine, a move that could prompt U.S. and European sanctions as early as Monday against those seen as responsible for the takeover of Crimea.
Polling stations open at 8am (0600 GMT) and close 12 hours later. Provisional results will be released late on Sunday with the final tally expected one or two days later.
The majority of Crimea's 1.5 million electorate support leaving Ukraine and becoming a part of Russia, citing expectations of better pay and becoming part of a country capable of asserting itself on the world stage.
But others see the referendum as nothing more than a power grab by bullies in the Kremlin prepared to exploit Ukraine's relative economic and military weakness.
Sergei, a Sevastopol resident, said he would vote for Crimea to join Russia, but that the referendum was dividing families.
"I haven't spoken to my brother Maxim since last month after we argued on the phone about the situation. He lives in Kiev and his wife has brainwashed him into supporting extremists there."
Russian President Vladimir Putin has justified his aggressive stance on Crimea by saying "fascists" in Kiev ousted his ally, Viktor Yanukovich, in February following a violent uprising in which nearly 100 people were killed.
The protests began when Yanukovich turned his back on a trade deal with Europe and decided instead on closer economic ties with Ukraine's former Soviet overlord - Russia.
Kiev and Western governments have declared the referendum illegal, but have been powerless to stop it.
According to a format of the ballot paper issued last week, voters will have two options to choose from - but both imply Russian control of the peninsula.
Ethnic Tatars, Sunni Muslims of Turkic origin who make up 12 percent of Crimea's population, said they would boycott the referendum, despite promises by the authorities to give them financial aid and proper land rights.
The streets of the Crimean capital Simferopol have been largely calm in the days leading up to the vote, although the heavy presence of armed men, many wearing black balaclavas, has created an unnerving atmosphere in the normally sleepy town.
Crimean Prime Minister Sergei Aksyonov, whose election two weeks ago in a closed session of the regional parliament is not recognised by Kiev, does not officially acknowledge that Russian troops are in control of Crimea - a position also maintained by Moscow.
They say that thousands of unidentified armed men, visible across the region, belong to "self-defence" groups created to ensure stability.
THOUSANDS OF SOLDIERS
But the Russian military, which leases the Crimean naval base of Sevastopol from Ukraine, has done little to hide the arrival of thousands of soldiers, along with trucks, armoured vehicles and artillery.
Masked gunmen surrounding Ukrainian military bases in Crimea have identified themselves as Russian troops.
Adding to tensions on the eve of the referendum, Ukraine's military on Saturday confronted Russian forces which crossed Crimea's regional border on a remote sand spit, some 30 km (20 miles) off the mainland.
Crimea's separatist government said its own forces had moved to defend a gas pumping station. Ukrainian officials said no shots were exchanged.
Late on Saturday, around 30 policemen carrying automatic weapons entered a Simferopol hotel popular with foreign journalists and took over the fourth floor.
The regional defence minister said security personnel had been called out on a false alarm, and accused Kiev of waging an "information war". Several witnesses said they believed the incident was designed to intimidate the media.
In the run-up to the referendum, the worst violence in Ukraine has been in the east, where acting president Oleksander Turchinov said there had been three deaths in two days.
He also said there was "a real danger" of invasion by Russian troops across the eastern border. The area has a large number of Russian-speakers - significant since Putin has vowed to protect ethnic Russians and Russian-speakers in Ukraine.