There are now two branches of government in Brunei: the executive and the legislative.

In relation to executive powers, the same family has ruled Brunei for over six centuries, the monarchy being hereditary. The present Sultan, Hassanal Bolkiah, is head of state and government and concurrently prime minister, defence minister and finance minister. One of the world's longest-reigning monarchs, he became sultan in October 1967 after his father, Sir Haji Omar Ali Saifuddin, abdicated. He was crowned in August 1968. Official policy is to encourage economic growth while preserving cultural and religious values. In 1991, in an effort the quiet calls for democratization, he introduced a conservative ideology called Malay Muslim Monarchy, which presented the monarchy as the defender of the faith.

Under Brunei's 1959 constitution, the Sultan is the head of state with full executive authority, including emergency powers since 1962, which are renewed every 2 years. The Sultan is assisted and advised by five councils, which he appoints—the Religious Council, the Privy Council, the Council of Cabinet Ministers, the Legislative Council and the Council of Succession. The Legislative Council was suspended in 1984, and since that time the Sultan has ruled through emergency decree. He has sole power to amend the provisions of existing laws. There are no elections; the last election was held in 1962. The Religious Council advises on religious matters; the Privy Council deals with constitutional matters, and the Council of Succession determines succession to the throne should the need arise. The Council of Ministers, or cabinet, which currently consists of 14 members (including the Sultan himself), deals with executive matters and assists in the administration of the government. The Sultan presides over the cabinet as Prime Minister. The only legal and registered political party at present is the Brunei National Solidarity Party.

With regard to legislative responsibilities, in September 2004, in a tentative step towards giving some political power to the country's citizens, the Legislative Council was revived to play an advisory role, with 21 members appointed by the Sultan. The Legislative Council met on 25 September 2004 and passed constitutional amendments calling for a 45-seat council with 15 elected members. The Sultan appointed a Legislative Council with 29 members as of 2 September 2005 and the council has met in March of each year since then. Although the constitution provides for an expanded house with up to 15 elected MPs, no immediate timetable for election of the proposed 15 directly elected members has been established. Currently, four of the 29 seats on the Council are indirectly elected by village leaders.

The Government of Brunei assures continuing public support for the current form of government by providing economic benefits such as subsidized food, fuel and housing; free education and medical care; and low-interest loans for government employees.

Brunei's legal system is based on English common law and Indian penal code, with an independent judiciary, a body of written common law judgments and statutes, and legislation enacted by the Sultan. The judicial system includes magistrate's courts, a High Court, a Court of Appeals and a Judicial Committee of the Privy Council (sits in London). Brunei also has a separate system of Islamic courts that apply Sharia law in family and other matters involving Muslims.