The square $C^{*2}$ of a linear error correcting code $C$ is the linear code spanned by the component-wise products of every pair of (non-necessarily distinct) words in $C$. Squares of codes have gained attention for several applications mainly in the area of cryptography, and typically in those applications one is concerned about some of the parameters (dimension, minimum distance) of both $C^{*2}$ and $C$. In this paper, motivated mostly by the study of this problem in the case of linear codes defined over the binary field, squares of cyclic codes are considered. General results on the minimum distance of the squares of cyclic codes are obtained and constructions of cyclic codes $C$ with relatively large dimension of $C$ and minimum distance of the square $C^{*2}$ are discussed. In some cases, the constructions lead to codes $C$ such that both $C$ and $C^{*2}$ simultaneously have the largest possible minimum distances for their length and dimensions.