The vast Persian Empire was divided into provinces called ‘satrapies’ that were governed by 'satraps'. The satrap was nearly always a Persian noble who ruled his province from a city that was often the old capital of the conquered state. For example, in Egypt the satrap governed from Memphis, and in Babylonia from Babylon. Each satrap probably relied on the local nobility to work for them, thereby maintaining a link with former regimes and ensuring no disruption in administration.

The provincial capitals also had palaces, often taken over from earlier kings. Here taxes were collected and stored. These resources were not only for the satrap and his staff but could be used to feed and maintain garrisons, while some was sent to the Persian king. Imperial administration was very complex although only a small number of the thousands of documents detailing petitions to satraps, satraps' decisions and orders, the allocation of supplies, and management of estates have survived. Access to supplies was carefully regulated with reports sent to the empire's central accounting office. Extensive roads linked the various provincial capitals and guard posts and way-stations for messengers were maintained by each satrap to ensure rapid communication and movement across the enormous distances of the empire.