Today, St. James's Palace remains a busy working palace. The State Apartments are sometimes used for entertaining during in-coming State Visits, as well as for other ceremonial and formal occasions. They host receptions for charities with which members of the Royal Family are involved, numbering approximately 100 in a year.

The offices of the Royal Collection Department, the Marshal of the Diplomatic Corps, the Central Chancery of the Orders of Knighthood, the Chapel Royal, the Gentlemen at Arms, the Yeomen of the Guard and the Queen's Watermen are all located at St. James's Palace. Since January 2009, the Household Office of Prince William and Prince Harry has been based at St. James’s Palace, although their official residence remains Clarence House.

St. James's Palace also retains an important ceremonial function. The Accession Council meets in St. James's Palace following the death of a monarch and, later, the accession of a new Sovereign is proclaimed by Garter King of Arms from the Proclamation Gallery overlooking Friary Court.

St. James's Palace contains the London residences of The Prince of Wales, The Princess Royal and Princess Alexandra.

The St. James's Detachment of The Queen's Guard mounts daily guard in Friary Court.

The Queen's Chapel and Chapel Royal remain active places of worship.

Clarence House, the former London home of the late Queen Elizabeth The Queen Mother, is within the environs of St. James's Palace and provides an official residence for The Prince of Wales, The Duchess of Cornwall and Prince William and Prince Harry.

Lancaster House, another building in the Palace complex, is used for government hospitality.