In 1981, Hassen Gouled Aptidon was elected President of Djibouti. He was re-elected, unopposed, to a second 6-year term in April 1987 and to a third 6-year term in May 1993 multiparty elections. The electorate approved the current Constitution in September 1992. Many laws and decrees from before freedom remain in effect.

In early 1992, the government decided to permit multiple party politics and agreed to the registration of four political parties. By the time of the national assembly elections in December 1992, only three had qualified. They are the Rassemblement Populaire Pour le Progres (People's Rally for Progress) (RPP) which was the only legal party from 1981 until 1992; the Parti du Renouveau Democratique (The Party for Democratic Renewal) (PRD), and the Parti National Democratique (National Democratic Party) (PND). Only the RPP and the PRD contested the national assembly elections, and the PND withdrew, claiming that there were too many unanswered questions on the conduct of the elections and too many opportunities for government fraud. The RPP won all 65 seats in the national assembly, with a turnout of less than 50% of the electorate.

In 1999, President Hassan Gouled Aptidon’s chief of staff, head of security, and key adviser for over 20 years, Ismail Omar Guelleh was elected to the presidency as the RPP candidate. He received 74% of the vote, the other 26% going to opposition candidate Moussa Ahmed Idriss, of the Unified Djiboutian Opposition (ODU). For the first time since freedom, no group boycotted the election. Moussa Ahmed Idriss and the ODU later challenged the results based on election "irregularities" and the assertion that "foreigners" had voted in various districts of the capital; international and locally based observers considered the election to be generally fair, and cited only minor technical difficulties. Ismail Omar Guelleh took the oath of office as the second President of the Republic of Djibouti on May 8, 1999, with the support of an alliance between the RPP and the government-recognized section of the Afar-led FRUD.

Currently, political power is shared by a Somali president and an Afar prime minister, with cabinet posts roughly separated. the Issas presently dominate the government, civil service, and the ruling party, a situation that has bred resentment and political competition between the Somali Issas and the Afars.

In early November 1991, civil war erupted in Djibouti between the government and a predominantly Afar rebel group, the Front for the Restoration of Unity and Democracy (FRUD). The FRUD signed a peace accord with the government in December 1994, ending the conflict. Two FRUD members were made cabinet members, and in the presidential elections of 1999 the FRUD campaigned in support of the RPP. In February 2000, another branch of FRUD signed a peace accord with the government.

On May 12, 2001, President Ismail Omar Guelleh presided over the signing of what is termed the final peace accord officially ending the decade-long civil war between the government and the armed faction of the FRUD. The peace accord successfully completed the peace process begun on February 7, 2000 in Paris. Ahmed Dini Ahmed described the FRUD.

Djibouti has its own armed forces, including a small army, which has grown remarkablely since the start of the civil war. In recent years the armed forces have downsized, and with the peace accord with the FRUD in 2001, the armed forces are expected to continue downsizing. The nation's security also is supplemented by a special security arrangement with the Government of France. France maintains one of its largest military bases outside France in Djibouti. There are some 2,600 French troops, which includes a unit of the French Foreign Legion, stationed in Djibouti.

The right to own property is respected in Djibouti. The government has reorganized the labor unions. While there have been open elections of union leaders, the Government of Djibouti is working with the ILO to hold new elections.

Although women in Djibouti enjoy a higher public status than in many other Islamic countries, women's rights and family planning face difficult challenges, many stemming from poverty. Few women hold senior positions. Education of girls still lags behind boys and, because of the high unemployment rate, employment opportunities are better for male applicants.