The Mages Guild was led by an Arch-Mage and guided by the Council of Mages, made up of six Archmagisters, one of whom was the Arch-Mage. By the Third Era, the Arch-Mage and the Council of Mages were headquartered at the guild's Arcane University in the Imperial City. The Council decided important Guild policies, such as its policy on the use of Necromancy, and also administered recruitment, sale of spells in each local Guild Hall, and the enforcement of Guild law. The rules of the Guild varied from location to location, some differences more drastic than others. In addition, Guild Halls existed in most cities in Tamriel, each of which was run by a local Guild Magister, alternatively known as a Hall Magister. Below the Magister were the Master of Incunabula, alternatively called the High Incunabulist, and the Master at Arms. The Master of Incunabula had a counsel of two, the Master of Academia and the Master of the Scrye. The Master at Arms also had a counsel, the Master of Initiates and the Palatinus, the leader of the local chapter of the Order of the Lamp.
 

Its charter from the Emperor specified that the guild must provide magic services to the public. Anyone could purchase potions, alchemical ingredients, magical items, and a selection of standard spells from the guild. However, training, goods, and services were cheaper for members, and the guild stewards were sometimes able to provide members with work. Furthermore, exclusive services such as spellmaking and enchanting, deemed potentially dangerous to the public at large, were only made available to higher-ranked guild members in good standing. The guild also has rules about fraternization and lewd advances.
 

Second Era

The Mages Guild was founded by Vanus Galerion circa 2E 230 as a way of centralizing magic and thus moving away from the many separate groups like the Psijic Order of which Galerion was a member that had dominated the study of magic until that time. In fact, the Psijic Order had already been falling out of grace with society. Its policy of isolationism led to mistrust, and its religion, best described as a type of ancestor worship, was an increasingly unfashionable philosophy by the Second Era. With the formation of the Mages Guild, Galerion spread knowledge of the magical arts to the layman, selling magical items, potions, and scrolls to the general populace. As such, magic was no longer restricted to the aristocracy or intelligentsia. Galerion named the office of the high guildmaster the Arch-Mage in memory of Shalidor, the first recorded mage to claim the title.

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The idea of Mages, Sorcerers, and assorted Mystics pooling their resources for the purpose of research and public charity was a revolutionary concept in the early Second Era. Galerion sought to prove the benefit of spellcasters working in close proximity, not for a mighty ritual, but for study, experimentation, and a sense of camaraderie. Thus, Galerion received the animosity of all. Operating out of Firsthold, Galerion was brought before his former mentor, Iachesis, the King of Firsthold, Rilis XII, and other notable nobles and members of the Psijic Order in the "Charter Conclave" of 2E 230 to state the intentions of the fraternity he was forming. This meeting was the consequence of a fearful commonfolk, who had urged their king to settle the issue of "Galerion's Folly" as it was known at the time. Kinlord Rilis instead saw in it a way to play both sides against each other. While Galerion's speech was not recorded for posterity, creating much scholarly interest into what lies and persuasions Galerion must have used, the charter was approved. Some posit that Rilis approved the charter merely to further his own ends, but can be considered a sort of co-founder to the Mages Guild, despite his later pacts with Daedra and sadistic tendencies. Before his cruelty became well-known, the common folk would believe that the Kinlord had made a deal with "dangerous mages", a misconception the Guild hastily sought to rectify. The Guild Act of 2E 231 further confirmed the Mages Guild and sanctioned its presence within the Second Empire.

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Immediately following the formation of the Guild, the question of security had to be addressed. Initially hiring guards, Galerion realized what the Tamrielic nobility had known for centuries; that money alone did not buy loyalty. To this end, Galerion formed the knightly Order of the Lamp.