Abstract Direct democracy—instruments that allow for citizens’ direct participation in legislative politics—is one of the corner stones of the Swiss political system. The chapter starts with a descriptive exercise of illustrating the historic emergence of direct-democratic institutions in Switzerland, how the institutions were introduced, and how access to these instruments was made easier over time. Apart from this de jure perspective, it also looks at the de facto use of these institutions over the last 170 years and shows that the use of the different institutions follows different patterns. Building on the descriptive part, it turns to the direct and indirect effects of direct democracy on the working of representative democracy. Direct-democratic institutions disperse power by either adding a potential veto player (e.g., the optional referendum) or by extending the set of actors that have agenda-setting power (e.g., initiative). There is a discussion of how the presence of these institutions alters the rationale of political actors and by doing so affects political processes and outcomes. In the last part of the chapter, the discussion broadens the geographic focus and compares direct-democratic institutions in Swiss cantons with direct-democratic institutions in subnational units in Germany and Austria as well as in states in the US. The chapter concludes with an outlook on the future prospects of direct democracy, namely how the working of these institutions could be affected by increasing societal polarization and by the digital transformation.