Penang, like the other states of Malaysia, has its own state government. However, the federal government (elected once every five years), is located in Kuala Lumpur, the capital of Malaysia.

In Penang, the head of state is the Yang DiPertua Negeri (Governor) who is appointed by the DYMM Sri Paduka Baginda Yang Di Pertuan Agong [i.e. the King, who incidentally is elected amongst and by the Sultans of the various states, which makes Malaysia the only country in the world with an elected monarchy]. He exercises the legislative powers of the state government on the advice of the legislative council which is headed by the Chief Minister. [Similarly, the Yang Di Pertuan Agong exercises the legislative powers of the federal government on the advice of the Parliament which is headed by the Prime Minister, which makes Malaysia a constitutional monarchy.]

While the Executive Council is the highest administrative body in the state, it is responsible to the Legislative Assembly, which holds election once every five years. The state secretariat and other state/central government departments assist the Executive Council in the administration of the state.

At the local government level, the state is divided into 2 local authorities, one on the island and the other on the mainland, namely the Municipal Councils of Penang Island and Province Wellesley respectively.