Since the end of World War II, the Christian Social Party (CSV) has almost continually been the dominant partner in governing coalitions. The CSV resembles Christian democratic parties in other west European countries and enjoys broad popular support. Its leader, Prime Minister Jean Claude Juncker, is the most senior head of government in the European Union.

The Socialist Party (LSAP) is a center-left party similar to most social democratic parties in Europe. Initially founded by a workerís movement and a main defender of universal suffrage in 1919, the LSAP defends state intervention in the economy and the sustainability of the welfare system. Part of the government from 1984 to 1999, it lost its junior coalition status to the Democratic Party but regained it in the 2004 elections. While in the opposition, the LSAP voiced opposition to U.S. action in Iraq.

The Democratic Party (DP) is a center-right party, drawing support from civil servants, the professions, and urban middle class. Like other west European liberal parties, it advocates both social legislation and minimum government involvement in the economy. It also is strongly pro-NATO. In the opposition from 1984 to 1999, the DP overcame the LSAP to claim the role of junior partner in the government from 1999-2004. It is currently again in the opposition. The Green Party has received growing support since it was officially formed in 1983. It opposes both nuclear weapons and nuclear power and supports environmental and ecological preservation measures. This party generally opposes Luxembourg's military policies, but it has shown some openness to peacekeeping missions.

National elections are held at least every 5 years and municipal elections every 6 years. In the June 2004 parliamentary elections, the CSV won 24 seats, the DP 10, the LSAP 14, the ADR (a single-issue party that emerged from the LSAP focused on pension rights) 5, and the "Greens" 7. As a result, the DP ceded their junior coalition position back to the LSAP, which had been the junior coalition member from 1984 to 1999. Jean-Claude Juncker (CSV) has remained for a third 5-year term as Prime Minister. In July 2004, Prime Minister Juncker announced the new government and appointed Jean Asselborn (LSAP) as the Vice Prime Minister and Minister of Foreign Affairs and Immigration.