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The City of American Canyon operates as a City Council and City Manager form of government. American Canyon is termed a general law city.

Making up the City Council are four elected Council Members and one elected Mayor. The Vice Mayor is appointed by the Council Members. The City Manager is appointed by the Council Members, and serves as the Chief Executive of the City.

American Canyon has a staff of approximately 100 employees, with more than 50 part-time and seasonal staff. The City's 2014-15 budget was just over $39 million (including the budget for the Fire District).

City departments include:

The City is served by the American Canyon Fire Protection District, a subsidiary entity governed by the City Council and administered by an appointed Fire Chief.