Under the 1987 constitution, the Supreme Court is an independent branch of government, whose members are selected for six-year terms by the National Assembly from lists submitted by the president. From among those members, the president selects the head of the Supreme Court. The constitution also provides that the Supreme Court justices appoint judges to the lower courts. Supreme Court justices can only be removed constitutionally "for reasons determined by law."

In National Assembly-approved 1990 reforms to the Organic Law of Tribunals, the Chamorro government enlarged the Supreme Court's membership from the constitutionally mandated seven justices to nine, as a way of breaking what was perceived as Sandinista domination of the court. Those seven members had been appointed to their six-year terms in December 1987, and their terms were to expire in 1993. In 1990 President Chamorro also dismissed the court's Sandinista-appointed head and replaced him with one of her own choosing. The evaluation of this act depended on one's political point of view. According to Nicaraguan analysts, the nine-member court decided that it would take decisions only on the basis of consensus, a procedure some saw as guaranteeing Sandinista influence on the court, others saw as neutralizing Sandinista influence, and still others saw as effectively paralyzing the operations of the court.