Curaçao is a constituent island of the Netherlands Antilles; the other islands are Bonaire, Saba, St Eustatius and St Martin. The Netherlands Antilles, The Netherlands and Aruba together form the Kingdom of the Netherlands. The Netherlands Antilles has achieved full autonomy in internal affaires since 1954. Aruba, which was formerly also one of the islands of the Netherlands Antilles, assumed a separate status within the Kingdom of the Netherlands in 1986. The Queen of the Netherlands is the Head of State and is represented in the Netherlands Antilles by the Governor General.

The Netherlands Antilles has two levels of government: a central (federal) government and a territorial (state) government. The central government consists of three bodies: a Governor General, the Council of Ministers, and a 22-member Parliament, known as Staten, which is elected every four years. The central government is responsible for federal affairs that include areas such as law enforcement, communications, taxes, public health, education and labor legislation.

The territorial government is responsible for the implementation of government policy and the island infrastructure. The island government of Curaçao is made up out of three bodies as well: a Lieutenant Governor, an Executive Council, and 21-member Island Council. The Island Council is elected every four years as well, even though these elections do not necessarily coincide with the elections of the central government.

National defense and conducting the activities related to foreign affairs fall under the responsibility of the Kingdom. The government of the Netherlands Antilles, the Parliament and the Court of Justice has their residence in Willemstad, the capital of Curaçao. Willemstad is also the financial, commercial and cultural center of the five islands.