The SBAs were retained in 1960 to keep military bases in areas under British sovereignty, along with the rights retained to use other Sites in what became the territory of the Republic.[18] That makes them different from the other remaining British Overseas Territories, except for the British Indian Ocean Territory which was similarly carved out of a former colony as a site for a military base, although in that case the base was to be used by the United States and the inhabitants (Chagossians) were all removed.

The basic philosophy of their administration was declared by Her Majesty's Government in 'Appendix O' to the 1960 treaty with Cyprus, which provided that the British government intended:

Not to develop the Sovereign Base Areas for other than military purposes.
Not to set up and administer "colonies".
Not to create customs posts or other frontier barriers between the Sovereign Base Areas and the Republic.
Not to set up or permit the establishment of civilian commercial or industrial enterprises except insofar as these are connected with military requirements, and not otherwise to impair the economic commercial or industrial unity and life of the Island.
Not to establish commercial or civilian seaports or airports.
Not to allow new settlement of people in the Sovereign Base Areas other than for temporary purposes.
Not to expropriate private property within the Sovereign Base Areas except for military purposes on payment of fair compensation.[19]
The ancient monuments and antiquity (in particular the site and remains of Curium, Sanctuary of Apollo Hylates near Curium,the Stadium of Curium and the Church and remains of the Monastery of St. Nicholas of the Cats) will be administered and maintained by the Republic of Cyprus. Licenses for antiquity excavation will be issued by the Republic but will be subject to the consent of the authorities of the Sovereign Base Areas. Movable antiquities found in excavations or discovered will be the property of the Republic.[20]

According to the Ministry of Defence,

Because the SBAs are primarily required as military bases and not ordinary dependent territories, the Administration reports to the Ministry of Defence in London. It has no formal connection with the Foreign and Commonwealth Office or the British High Commission in Nicosia, although there are close informal links with both offices on policy matters.[21]

The territory is administered by an Administrator, who is also the Commander of British Forces Cyprus (from November 2012 Major General Richard Cripwell.[22] The Administrator is officially appointed by the British monarch, on the advice of the Ministry of Defence. The Administrator has all the executive and legislative authority of a Governor of an overseas territory. A Chief Officer is appointed, and is responsible to the Administrator for the day-to-day running of the civil government, with subordinate Area Officers responsible for the civil administration of the two areas. No elections are held in the territory, although British citizens are normally entitled to vote in United Kingdom elections (as British Forces or overseas electors).

The Areas have their own legal system, distinct from the United Kingdom and Cyprus. This consists of the laws of the Colony of Cyprus as at August 1960, amended as necessary. The laws of Akrotiri and Dhekelia are closely aligned with, and in some cases identical to, the laws operating within the Republic of Cyprus.[23] The Court of the Sovereign Base Areas is concerned with non-military offences committed by any person within Akrotiri and Dhekelia, and law and order is maintained by the Sovereign Base Areas Police, while military law is upheld by the Cyprus Joint Police Unit. Fire and Rescue services are provided by the Defence Fire and Risk Management Organisation through stations at Episkopi, Akrotiri, Dhekelia and Ayios Nikolayos. The Defence Medical Services provide emergency ambulance cover based from medical centres in the main bases. All emergency services are accessible from any telephone using the Europe-wide emergency number 112.