Vatican City is an ecclesiastical or sacerdotal-monarchical state, ruled by the Bishop of Rome?the Pope. The highest state functionaries are all clergymen of the Roman Catholic Church. It is the sovereign territory of the Holy See (Sancta Sedes) and the location of the Pope's residence, referred to as the Apostolic Palace.

The Popes have resided in the area that in 1929 became the Vatican City since the return from Avignon in 1377. Previously, they resided in the Lateran Palace on the Caelian Hill on the opposite side of Rome, which was out of repair in 1377. The signing of the agreements that established the new state took place in the latter building, giving rise to the name of Lateran Pacts, by which they are known.