Constitutional courts are established pursuant to Article III of the Constitution, which states, "The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish." These courts have only the powers specified in Article III. They can hear only "cases or controversies"; their judges hold office for life, as long as they are not guilty of judicial misconduct; and their judges' salary cannot be reduced while those judges serve in office.

The Supreme Court, the United States Courts of Appeals (including the United States Court of Appeals for the Federal Circuit), the United States district courts, and the Court of International Trade are constitutional, or Article III, courts.

Legislative courts are known as Article I courts because they are created pursuant to the authority given to Congress in Article I, Section 8, Clause 9, of the Constitution. That section empowers Congress "To constitute Tribunals inferior to the supreme Court." No restrictions exist as to the type of court that must be created. Such courts can possess whatever jurisdiction Congress deems appropriate. Judges can be appointed by specific terms of years, and salaries can be adjusted in response to the changing economy.

In earlier times, legislative courts were the best means to bring justice into the territories. Territorial courts heard all kinds of cases that the constitutional courts could not hear, such as divorce cases. Once a territory became a state, cases that fell within the jurisdiction of the federal court would be transferred to the federal court established in the new state; all other cases would be heard in the courts of the newly created state.

The United States Tax Court and the United States Court of Federal Claims are legislative courts. Although the Court of Military Appeals was created pursuant to Article I, it is not part of the judiciary but functions as a military tribunal to make rules, to regulate the armed services, and to review courts-martial.

Structure
District courts function as general trial-level courts in the federal system. An appeal from a judgment rendered in a district court is taken to the court of appeals in the judicial circuit in which the district court sits. The Supreme Court hears appeals from a court of appeals pursuant to its mandatory jurisdiction, certiorari jurisdiction, and its rarely used jurisdiction to decide questions of law certified to it by the court of appeals. In addition, specialized federal courts such as the United States Court of Federal Claims, the United States Court of International Trade, the United States Court of Appeals for the Federal Circuit, and the United States Tax Court entertain and determine cases that involve only certain areas of law.