The 1987 constitution replaced the bicameral Congress, which had existed under previous constitutions, with a unicameral National Assembly. The makeup of the National Assembly, first established under the 1984 decree and confirmed by the 1987 constitution, consists of ninety members directly elected by a system of proportional representation plus any unelected presidential or vice presidential candidates who receive a certain percentage of the vote. In 1985 the National Assembly had ninety-six members and in 1990, ninety-two. Terms are for six years, to run concurrently with the president's term.

The National Assembly has significant powers, and its cooperation is essential for the smooth functioning of the government. Under the constitution, representatives to the National Assembly propose legislation, which is made law by a simple majority of the representatives present if the National Assembly has a quorum (a quorum is half the total number of representatives, plus one) The National Assembly can override a presidential veto by quorum. The constitution also gives the National Assembly the power "to consider, discuss and approve" the budget presented by president. The National Assembly chooses the seven members of the Supreme Court from lists provided by the president and has the authority to "officially interpret the laws," a prerogative that gives the National Assembly judicial powers.

The Chamorro administration has faced a legislature that, despite its division between the Sandinista members and the members of the UNO coalition, has proved a formidable power in its own right--and one with which the executive branch is often in conflict. In the 1990 elections, of the ninety-two seats in the National Assembly, the UNO won fifty-one and the FSLN gained thirty-nine. The FSLN won thirty-eight seats in assembly races, and President Ortega was given a seat under the provision granting a seat to each losing presidential candidate who earns a certain percentage of the vote. Two other parties of the ten on the ballot gained single seats. One was won by the Christian Social Party (Partido Social Cristiano--PSC) in a legislative race; another was awarded to the losing presidential candidate of the Revolutionary Unity Movement (Movimiento de Unidad Revolucionaria--MUR), a breakaway faction of the FSLN. The only significant brake on UNO's power was that its majority of 55 percent fell short of the 60 percent needed to amend the Sandinista-approved constitution, a goal of some members of the UNO coalition. The slim UNO majority also presented practical problems for the UNO president because it was possible for relatively few defections from the UNO coalition to undermine the UNO government's programs and initiatives.