Emperor Gaozu initially made Luoyang his capital, but then moved it to Chang'an (near modern Xi'an, Shaanxi) due to concerns over natural defences and better access to supply routes. Following Qin precedent, Emperor Gaozu adopted the administrative model of a tripartite cabinet (formed by the Three Excellencies) along with nine subordinate ministries (headed by the Nine Ministers). Despite Han statesmen's general condemnation of Qin's harsh methods and Legalist philosophy, the first Han law code compiled by Chancellor Xiao He in 200 BCE seems to have borrowed much from the structure and substance of the Qin code.

From Chang'an, Gaozu ruled directly over 13 commanderies (increased to 16 by his death) in the western portion of the empire. In the eastern portion, he established 10 semi-autonomous kingdoms (Yan, Dai, Zhao, Qi, Liang, Chu, Huai, Wu, Nan, and Changsha) that he bestowed to his most prominent followers to placate them. Due to alleged acts of rebellion and even alliances with the Xiongnu—a northern nomadic people—by 196 BCE Gaozu had replaced nine of them with members of the royal family.

According to Michael Loewe, the administration of each kingdom was "a small-scale replica of the central government, with its chancellor, royal counsellor, and other functionaries." The kingdoms were to transmit census information and a portion of their taxes to the central government. Although they were responsible for maintaining an armed force, kings were not authorized to mobilize troops without explicit permission from the capital.