The Galactic Center is an excellent laboratory for studying phenomena and physical processes that may be occurring in many other galactic nuclei. The Center of our Milky Way is by far the closest galactic nucleus, and observations with exquisite resolution and sensitivity cover 18 orders of magnitude in energy of electromagnetic radiation. Theoretical simulations have become increasingly more powerful in explaining these measurements. This review summarizes the recent progress in observational and theoretical work on the central parsec, with a strong emphasis on the current empirical evidence for a central massive black hole and on the processes in the surrounding dense nuclear star cluster. We present the current evidence, from the analysis of the orbits of more than two dozen stars and from the measurements of the size and motion of the central compact radio source, Sgr A*, that this radio source must be a massive black hole of about 4.4 times 1e6 Msun, beyond any reasonable doubt. We report what is known about the structure and evolution of the dense nuclear star cluster surrounding this black hole, including the astounding fact that stars have been forming in the vicinity of Sgr A* recently, apparently with a top-heavy stellar mass function. We discuss a dense concentration of fainter stars centered in the immediate vicinity of the massive black hole, three of which have orbital peri-bothroi of less than one light day. This S-star cluster appears to consist mainly of young early-type stars, in contrast to the predicted properties of an equilibrium stellar cusp around a black hole. This constitutes a remarkable and presently not fully understood paradox of youth. We also summarize what is known about the emission properties of the accreting gas onto Sgr A* and how this emission is beginning to delineate the physical properties in the hot accretion zone around the event horizon.
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