Portugal is a unitary multi-party semi-presidential representative democratic republic, whereby the prime minister is the head of government, and the president is the non-executive head of state which, although it is a somewhat ceremonial figure, has some significant political powers they exercise often. Executive power is exercised by the government, whose leader is the prime minister. Legislative power is primarily vested in the Assembly of the Republic (the Portuguese parliament), although the government is also able to legislate on certain matters. The Judiciary of Portugal is independent of the executive and the legislature. The President exerts a sort of "moderating power", not easily classified into any of the traditional three branches of government.

Since 1975, the party system has been dominated by the center-left Socialist Party and the liberal-conservative Social Democratic Party, but in the 2025 snap elections, the nationalist far-right Chega managed to achieve 23% of the popular vote and got 60 seats in the Assembly of the Republic, leading the opposition.

The 2025 Economist Democracy Index classified Portugal as a "Full democracy", ranking number 20th worldwide, while the 2026 V-Dem Democracy Indices ranked Portugal as the 23rd most electoral democratic country in the world, but, for the first time, put the country on the V-Dem's Watchlist of countries very close to becoming autocratizers.

The national and regional governments are dominated by two political parties, the centre-left Socialist Party (PS), a social-democratic party, and the centre-right, liberal-conservative Social Democratic Party (PSD), which have similar basic policies in some respects: both are pro-European, support NATO membership and the welfare state. Other parties with seats in parliament are Chega, the Portuguese Communist Party, the Left Bloc, LIVRE, the Liberal Initiative and People-Animals-Nature. The Communists and the Ecologist Party "The Greens" run in a coalition as the Unitary Democratic Coalition.

In the Portuguese legislative election of 2011, the PSD won enough seats to form a majority government with the Christian democratic People's Party (CDS-PP). The coalition, led by Prime Minister Pedro Passos Coelho, was supported by a majority in the Parliament, with 132 of the 230 MPs. The major opposition party was the Socialist Party (the party of the former prime minister José Sócrates, in office 2005–2011) with 74 MPs. Also represented were the Portuguese Communist Party (14 MPs), "The Greens" (2 MPs) and the Left Bloc (8 MPs), all to the left of the governing coalition.

In the 2015 elections, which the PSD and CDS-PP contested as a coalition, Portugal Ahead, the government lost its absolute majority. The left-wing parties, the Socialist Party, Portuguese Communist Party, Ecologist Party "The Greens", and Left Bloc, argued that as they were willing to form a coalition which would have a majority in the assembly, they ought to be invited to form the government, while Portugal Ahead, as the largest grouping, argued that they should be invited to form the government. After three weeks of uncertainty, the President designated Passos Coelho as prime minister, which was followed by the formation of a minority government. However, the plan was rejected by the Parliament. It was the shortest-lived Portuguese national government since the Carnation Revolution. After that, the left-wing parties supported a minority government led by the Socialist Party (PS). António Costa's first government was formed on 26 November 2015.

In the Portuguese legislative of 2019, the centre-left PS of incumbent Prime Minister Costa obtained the largest share of the vote, and the most seats. On 26 October 2019, there was established a new PS minority government led by Prime Minister António Costa. In the snap 2022 election the ruling PS won an outright majority. Following the Operation Influencer police searches, in November 2023, António Costa resigned and snap elections were called for 10 March 2024, which were won by the Democratic Alliance.

The first constitution was created in 1822 (following the Liberal Revolution of 1820), followed by a second in 1826, followed by a third in 1838 (after the Liberal Wars), a fourth in 1911 (following the 5 October 1910 revolution), and a fifth 1933 (after the 28 May 1926 coup d'état).