The Sentencing Reform Act of 1984 (98 Stat. 1987) established the United States Sentencing Commission as an independent commission within the judicial branch of government. The commission is responsible for developing guidelines that prescribe a range of sentences for federal judges to use in criminal cases. According to the statute, the guidelines are intended to establish fairness in sentencing, to prevent disparities in the sentencing of similar defendants, and to reflect "advancement in knowledge of human behavior as it relates to the criminal justice process." The act also indicated that the guidelines should reflect the seriousness of the crime, deter other criminal activity, and protect public security.

The seven voting members of the commission are appointed by the President to six-year terms. The Attorney General, or a designee thereof, serves as a non-voting member. The 1984 act requires that at least three members of the commission be federal judges, to be selected after considering a list of six judges recommended by the Judicial Conference of the United States. No more than four members of the commission may be members of the same political party.

The first sentencing guidelines became effective November 1, 1987. In January 1989, the Supreme Court, in Mistretta v. United States (488 U.S. 361), decided that the Sentencing Commission was constitutional. The Commission conducts research to evaluate the effects of the sentencing guidelines and to determine possible revisions of the guidelines. It submits proposed amendments to the guidelines to Congress, which has authority to disapprove the changes. The Commission also provides reports to the Judicial Conference and members of the executive branch on matters related to crime policy and sentencing.