The position of Premier of Prince Edward Island was established in 1851 as part of the reform package ushered in called "responsible government". George Coles was the first to serve as Premier, being commanded by His Excellency Lieutenant Governor Bannerman to form the new government. Previous to 1851 governance of the colony was conducted by the Governor, an Executive Council appointed by the Crown to advise and assist the Governor, and an elected Assembly. The choice of premier is now straightforward; the role is assumed by the leader of the political party which holds the majority of seats in the legislature.

Traditionally the premiership of the province has not been the reward of a glittering political career. Time in the office in the majority of cases has been brief and the remuneration has not conducive to making the post more than "a fascinating part-time job or as a stepping stone to something more permanent". In a few cases the Premier has used the office as a springboard to federal politics but a seat on the judiciary has been the preferred goal of many former premiers.

In his capacity as leader the Premier chooses the cabinet and may keep portfolios for himself, such as President of the Executive Council, or, if he is a lawyer, Attorney General. One of the most striking aspects of the premiership of such a small constituency has been the familiarity people have felt towards those holding the office; consequently people have not hesitated to communicate with the premier on any personal or policy issue which might be sorted with government intervention. Another important element of the premier's workload has involved communication with the federal government in Ottawa. Given the Island's small population and limited resources, negotiations for resources and services from Ottawa have been an ongoing element of the Premier's responsibilities.