This chapter examines the role that political parties play in the working of democracy. Political parties are among the major actors in democratic politics. Whether or not in power as the result of victory in free and fair elections, the governments of most countries have effectively been in the hands of party leaders. When governments were not in the hands of party leaders, most often it was because party government was interrupted by a military takeover. The chapter first considers various definitions of a political party, before tracing the origins of political parties. It then describes the functions of parties and the ways in which parties are organized, regulated, and financed. It concludes with an analysis of the role of parties in the stabilization of democracy in the late twentieth and early twenty-first centuries, as well as challenges confronting parties in the new millennium.