The Village of Libertyville is a non home rule municipality governed by a Village President (Mayor) and a board of six trustees (the "Village Board"). The president and the six trustees are elected at large to four-year terms. The Village Board formulates policy, approves the annual budget, and determines the Village property tax rate.

The Village also operates as a council/administrator form of government. The Village Administrator is appointed by the Mayor, subject to majority approval of the Village Trustees, and is the chief administrative officer of the Village. The Village Administrator is responsible for direction and supervision of the day-to-day affairs, activities and services of the Village. All policy related matters that come before the Village are dealt with by the Mayor and Board of Trustees, who look to the Village Administrator and staff for recommendations and suggested alternatives in such matters.

The Village year runs May 1 to April 30 annually. Each February the staff presents to the Village Board a draft budget for consideration. The Mayor and Village Board generally hold a series of budget workshops, a public hearing, and formally adopt the budget in April of each year. The Village operates under a "budget officer" system which establishes the budget as the legal document for Village expenditures. The current Village budget represents expenditures of $44.6 million, which include general funding for general operations and Village services, utilities, capital improvements and bond fund payments. The Village enjoys a diverse tax base and its strong financial position has been recognized by a Moody's Investor Service bond rating of Aa2, and numerous awards from the Government Finance Officers' Association.