The legislative organ of the territory is the Legislative Assembly, a 29-member body of 12 directly elected members, 10 appointed members representing functional constituencies, and seven members appointed by the chief executive. The Legislative Assembly is responsible for general lawmaking, including taxation, the passing of the budget, and socioeconomic legislation. In the last election, held in September 2005, pro-entertainment industry groups won five of the 10 directly elected seats, pro-democracy groups won two seats, and pro-China parties won four; a former civil servant took the remaining seat. The next election will be held in 2009. The city of Macau and the islands of Taipa and Coloane each had a municipal council until January 1, 2002, when the Civic and Municipal Bureau was formally established to replace the two municipal councils.

The legal system is based largely on Portuguese law. The territory has its own independent judicial system, with a high court. Judges are selected by a committee and appointed by the chief executive. Foreign judges may serve on the courts. In July 1999 the chief executive appointed a seven-person committee to select judges for the SAR. Twenty-four judges were recommended by the committee and were then appointed by Mr. Ho. Macau has three courts: the Court of the First Instance, the Court of the Second Instance, and the Court of Final Appeal, Macau's highest court. Sam Hou Fai is the President (Chief Justice) of the Court of Final Appeal.