Except for the schools, town governance is vested in a seven member Town Council, elected at large for staggered three-year terms. Municipal elections are held on the Tuesday following the first Monday in November. Candidates for Town Council and the seven member School Board run on a non-partisan basis.

The Town Council appoints the town manager, town assessor, town attorney and members of numerous citizen boards and committees. The council enacts ordinances after public hearings and determines overall policy. The council also adopts an annual budget each May.

The town manager administers day-to-day operations and appoints department heads subject to the approval of the Town Council. The manager prepares the budget and is responsible for its implementation.

The Town has a full-time police department, on-call fire and rescue companies, a public works department, assessing, codes and planning offices, a public library, a lighthouse museum, an emergency preparedness department, a full service Town Hall, and administers a local general assistance program. Cape Elizabeth contracts with Portland for emergency dispatching. Water and sewer services are provided by the Portland Water District. Electric service is from Central Maine Power Company.