Low-temperature scanning tunneling spectroscopy over Co nanoislands on Cu(111) showed that the surface states of the islands vary with their size. Occupied states exhibit a sizeable downward energy shift as the island size decreases. The position of the occupied states also significantly changes across the islands. Atomic-scale simulations and ab inito calculations demonstrate that the driving force for the observed shift is related to size-dependent mesoscopic relaxations in the nanoislands.PACS numbers: 73.20.At, It was recognized quite early that metallic particles exhibit unique properties that differ significantly from their bulk counterparts [1]. Nanoislands grown on metal surfaces, in particular, have been a matter of intense research for decades in view of prospective applications in a vast variety of domains ranging from magnetoelectronics, catalysis, optoelectronics, to data storage technology. The electronic, magnetic and chemical properties of a nanoisland are governed by the size, shape and structure of the island. These, in turn, are profoundly influenced by the lattice mismatch with the metal substrate and, for heteroepitaxial systems, also by the bonding interactions in the island/substrate interface (ligand effects). Metal islands tend to adopt the lattice parameter of the underlying surface [2], and as a consequence the bond lengths between the metal atoms in the supported nanoisland are different than those in the parent metals, resulting in changes due to strain. A theoretical study on homoepitaxial double layer Cu islands on Cu(111) [3], has shown that the strain produces an inhomogeneous distribution of bond lengths over the nanoisland, the average bond length varying with island size. The nanoislands also locally distort the surface and induce a displacement pattern in the substrate which affects the diffusion of atoms and, ultimately, the growth of the nanoislands.Despite these studies, our knowledge of how strain affects the properties of a metallic nanoisland, especially the electronic states, remains very limited. The fundamental problem of the change in energy upon lattice distortion in solids has first been addressed by J. Friedel within a simple model [4], and latter on extended to various problems of lattice contractions at metal surfaces and clusters [5]. On the same lines, it has been shown for thin films that strain effects, along with ligand effects, can cause a shift of the surface d band [6,7,8], resulting in chemical properties that are significantly different from those of the pure overlayer metal. Recently, a modification of electronic states due to a local strain field induced by a nanopattern formation has been observed for Cu(100) covered with N atoms [9].In this Letter, we specifically focus on the interplay between strain-induced structural relaxations and the surface states of Co nanoislands on Cu(111). These nanoislands constitute a reference system that has been extensively investigated by Scanning Tunneling Microscopy/Spectroscopy (STM/STS) [10,11,12,13,14]. By ...